Crude falls below $31 pushing raw-materials producers lower U.S stock volatility jumps on weak economic growth concern Share on Facebook Share on Twitter Global equities extended declines as a sliding oil price weighed on industry groups from banks to commodity producers and dragged down emerging markets. European shares dropped the most in two weeks and U.S. stock-index futures also sank. Crude fell through $31 a barrel in New York, after retreating last session, when Iran’s oil minister derided a plan forged by Saudi Arabia and Russia to lock production at January levels. The Russian ruble retreated and the pound weakened below $1.39 for the first time since 2009 on concern the U.K. may exit the European Union. Brazil’s real fell as Moody’s Investors Service downgraded the nation’s debt to junk. The cost of insuring investment-grade corporate debt rose for the first time in three days, while Treasuries and the yen advanced. Oil’s retreat, together with slowing growth in China, has dragged down stocks since the start of the year and the fragility of investor sentiment was demonstrated Tuesday, when a gauge of expected volatility in American equities rose by the most in two weeks. Adding to the global misgivings are Britain’s referendum on EU membership and signs Donald Trump may secure the Republican presidential nomination, including his dominance of the Nevada caucuses. “The fact that Saudi Arabia would rather give out the oil for free instead of giving market share to Iran will continue to weigh on oil prices, and this weighs on markets,� said Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. “We don’t expect volatility to calm in the next days.� The MSCI All Country World Index fell 0.9 percent at 7:24 a.m. in New York. West Texas Intermediate crude declined 3.5 percent to $30.76 a barrel. Stocks The Stoxx Europe 600 Index slipped 2.1 percent, falling for a second day amid the downturn in commodity prices, disappointing earnings results and dissipating faith in central bank support. It hasn’t posted two consecutive days of gains since December. Miners fell the most, with Glencore Plc and BHP Billiton Ltd. losing more than 8 percent. Statoil ASA and Royal Dutch Shell Plc led a gauge of energy-related companies lower after Iran branded the plan agreed on by Saudi Arabia and Russia -- the world’s two largest oil producers -- as “ridiculous.� Every member of the STOXX 600 Banks Index declined. Standard & Poor’s 500 Index futures dropped 0.8 percent, after the index Tuesday fell from a six-week high. Among companies posting earnings, Target Corp. will be a focus for signs of the health of the U.S. consumer. A preliminary reading due Wednesday will show services activity increased in the U.S. in February, according to economist estimates. A separate report is forecast to say sales of new homes declined in January. Commodities Oil futures slid as much as 3.7 percent in New York. Saudi Arabia’s proposal to cap output at January levels puts “unrealistic demands� on Iran, Oil Minister Bijan Namdar Zanganeh said Tuesday, according to the ministry’s news agency Shana. Ali Al-Naimi, his counterpart from Saudi Arabia, said at a conference in Houston that high-cost producers should bear the burden of reducing the current surplus and reaffirmed the kingdom’s commitment to last week’s accord. Crude is down 17 percent this year on speculation a global glut will persist amid the outlook for increased shipments from Iran and brimming U.S. supplies, which are at the highest level in more than eight decades. The nation’s stockpiles expanded by 7.1 million barrels last week, the industry-funded American Petroleum Institute was said to report Tuesday. Copper led losses in industrial metals on concerns that rising stockpiles in China signal continued weak demand in the world’s biggest consumer. Inventories in warehouses tracked by the Shanghai Futures Exchange have more than doubled to a record since the end of August, bourse data show. Copper for delivery in three months slid 2.4 percent in London. Currencies Sterling dropped 1 percent to $1.3889, the lowest since March 2009. It also fell against the euro. The pound has been falling all week after London Mayor Boris Johnson, one of the nation’s most popular politicians, said Sunday he’ll campaign for the U.K. to exit the EU in a referendum. Lower crude prices dragged on the currencies of oil exporters Russia and Malaysia. The ruble dropped 2.4 percent and the ringgit fell 0.6 percent. The real slid 0.8 percent. Moody’s cut the country’s credit rating to Ba2 from Baa3, with a negative outlook. The Bloomberg Dollar Spot Index added 0.4 percent. Japan’s yen climbed versus all of its major counterparts, strengthening 0.3 percent to 111.78 per dollar. China’s yuan fell for a fourth day as the People’s Bank of China set its reference rate at the lowest level in almost three weeks. Figures from the nation’s foreign-exchange regulator released Tuesday afternoon showed banks net sold overseas currencies to their clients for a seventh straight month in January. The yuan weakened 0.15 percent to 6.5370 against dollar, according to China Foreign Exchange Trade System prices. The central bank cut the reference rate by 0.04 percent to 6.5302 following a 0.17 percent reduction on Tuesday. Separately, the PBOC said that most types of overseas financial institutions will no longer require quotas to invest in the interbank bond market, which accounts for the bulk of debt in the nation. Officials from the world’s biggest economies will meet in Shanghai on Feb. 26 and 27 to discuss the recent turmoil in China’s markets and ways to bolster a safety net for the global financial system, according to people familiar with the agenda for the talks. Bonds Government bonds climbed as the drop in oil prices dimmed the outlook for inflation, preserving the value of fixed payments on the securities. The yield on German 10-year bonds fell to as low as 0.131 percent, the lowest level since April, while those on similar-maturity U.K. bonds fell seven basis points to 1.36 percent. The yield on 10-year Treasuries slid three basis points to 1.69 percent. Portuguese two-year notes advanced before the nation holds a buyback of short-dated debt on Thursday. The yield dropped two basis points to 0.87 percent. Yields on Japanese sovereign notes due in a decade fell as low as negative 0.055 percent, a record. “It all goes back to the recent volatility in inflation expectations,� said Jim Vogel, head of interest-rate strategy at FTN Financial in Memphis, Tennessee. Falling oil “puts pressure on shorter-term inflation expectations.� The cost of insuring investment-grade corporate debt rose for the first time in three days. The Markit iTraxx Europe Index of credit-default swaps climbed three basis points to 111 basis points. A gauge of swaps on junk-rated companies increased for a second day, jumping 18 basis points to 445 basis points. Emerging Markets The MSCI Emerging Markets Indexfell for a second day, losing 1 percent. South Africa’s benchmark dropped 1.9 percent and India’s S&P BSE Sensex lost 1.4 percent, while Russia’s Micex Index slid 1.6 percent as trading resumed following a holiday. Chinese stocks trading in Hong Kong slid the most in almost two weeks, with the Hang Seng China Enterprises Index declining 1.3 percent. PetroChina Co. fell 2.1 percent, halting a two-day advance. The BGCC 200 Index of Gulf stocks lost 0.7 percent, with Saudi Arabia’s Tadawul All Share Index sliding 0.9 percent and Dubai shares dropping 1.7 percent.

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