Global shares follow oil
down after Doha disappointment
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[April 18, 2016]
By Patrick Graham
LONDON (Reuters) - A dive in oil prices
sent stock markets lower on Monday after producers meeting in Qatar
failed to agree on a plan to curb global supply, quashing the more
optimistic tone which prevailed for much of the past week.
Japan's Nikkei index led the way, tumbling more than 3 percent after
a devastating earthquake in the southwest of the country, with signs
from a summit in Washington that other Group of 20 governments
oppose intervention against the strength of the yen also playing a
Europe's major exchanges all fell by more than half a percent on
opening, while markets in Hong Kong and Shanghai lost around 1
Oil prices were down 4 percent on the day, with U.S. crude falling
back below $40 for the first time in a week.
Some 18 oil-exporting nations, including OPEC members, had gathered
in Doha, the capital of Qatar, over the weekend in an attempt to
agree to stabilise output at January levels until October 2016. The
pact fell apart after Saudi Arabia demanded that Iran join in.
"The short-term impact on prices is clear to see this morning, while
longer term itís hard to see supply slowing much this year," said
Joe Rundle, Head of Trading at ETX Capital in London.
"In the end it proved just too much for the Saudis to cut a deal
The plunge in crude oil prices took a large slice out of commodity
currencies, pushing the dollar almost 1 percent higher against its
Canadian counterpart to C$1.2926.
The yen, traditionally a target for capital in times of global
stress, hit a 3-year high against the euro. It rose half a
percent against the dollar but was still well short of highs of
107.63 yen per dollar hit a week ago.
The 7.3 magnitude quake struck early on Saturday and was centred in
Japan's Kumamoto prefecture, an important manufacturing hub.
Shares of Sony Corp fell almost 7 percent after the electronics
giant said its image sensors plant in Kumamoto would remain
suspended. Toyota Motor Corp tumbled 4.8 percent after suspending
production at plants across Japan due to disruptions to its supply
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"Many are waiting for the dust to settle as it is not yet possible
to quantify the damage in its entirety," said Martin King,
co-managing director at Tyton Capital Advisors.
One big exception to the rule was Brazil, where stock markets are
expected to react euphorically to a vote to impeach President Dilma
Rousseff that looked set to force her from office after 13 years of
leftist Workers Party rule.
Brazil's stocks and currency have been among the world's
best-performing assets in recent weeks on growing bets that Rousseff
would be removed from office, allowing her successor to adopt more
"Brazilian assets will most likely react positively to news of
Rouseff's impeachment," analysts from retail broker Swissquote said
in a note. "But we expect the overall risk-off sentiment to cap the
(Additional reporting by Danilo Masoni in MILAN, Joshua Hunt in
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