Investing.com - Here are the top five things you need to know in financial markets on Monday, January 25:
1. Oil resumes decline as massive short squeeze rally ends
Oil prices resumed their decline on Monday, falling as much as 4% as last week’s massive short-covering rally came to an end.
U.S. crude was down 84 cents, or 2.59%, to trade at $31.35 by 10:45GMT, or 5:45AM ET, while, Brent fell 59 cents, or 1.78%, to $32.26.
Market analysts viewed last week’s 14% two-day surge on Thursday and Friday as a classic dead-cat bounce from oversold conditions. More losses were seen ahead as investors turn their focus back to concerns over a global supply glut and slowing global demand.
2. Asian stock markets rise on stimulus hopes
Asian equity markets rose overnight, amid hopes for fresh central bank stimulus in Japan and as earlier gains in the price of oil boosted the region’s energy sector.
Japan’s Nikkei 225 tacked on 0.9%, Australia’s S&P/ASX 200 rallied 1.8%, while the Shanghai Composite Index finished 0.8% higher.
3. European shares wobble as oil prices pull back
European stock markets wobbled between small gains and losses in choppy trade on Monday, as the renewed drop in oil prices hit market sentiment.
European shares rallied late last week after European Central Bank President Mario Draghi indicated Thursday that the bank could roll out fresh stimulus measures as soon as its next meeting in March.
4. Wall Street points to modest losses
U.S. stock markets pointed to modest losses at the open on Monday, as weak oil prices and concerns surrounding global growth continued to grip markets.
Market analysts warned that trading volumes could be lighter than usual after an extreme blizzard brought the East Coast to a standstill over the weekend, complicating transportation for New York traders.
The blue-chip Dow futures fell 37 points, or 0.23%, the S&P 500 futures slumped 3 points, or 0.16%, while the Nasdaq 100 futures dropped 9 points, or 0.2%. U.S. stock markets closed higher on Friday, for their first positive week of the year.
In earnings news, McDonald's (N:MCD), Kimberly-Clark (N:KMB) and Halliburton (N:HAL) are due to report quarterly earnings ahead of Monday’s opening bell.
5. German Ifo business climate falls to 11-month low in January
German business confidence deteriorated to the lowest level in 11 months in January, as mounting concerns over the health of the global economy weighed, according to German research institute Ifo.
The Ifo’s business climate index fell to 107.3 this month from 108.6 in December, below forecasts for 108.4. The business expectations index, which measures attitudes toward business prospects over the next six months, dipped to 102.4 this month from 104.6 in December, further clouding the outlook for the global economy.