Stock markets are headed for their worst performance during the month of January since 2016 as concerns about high inflation and the prospect of rising interest rates cause extreme volatility worldwide.
Investors and traders say the outlook for equities remains uncertain as central banks tighten policy, with the Bank of England expected to hike rates again later this week, and as another rise in oil prices adds to inflation concerns.
European markets were staging a small rally today (January 31), with the Euro STOXX up 0.62%, the German DAX up 0.64% and Britain's FTSE 100 up a slight 0.1%.
Lunar New Year holidays made for thin trading in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan closed up 0.68%.
However, S&P 500 futures point to a lower open today while Nasdaq futures climbed 0.4%. The tech-heavy Nasdaq has borne the brunt of selling this month and is down 14% from a record peak reached late last year.
The MSCI World stock index, while higher today, remains down 6.2% in January, its worst start to a year since 2016. Before last Friday's (January 28) rebound, the index was headed for its worst January since the global financial crisis in 2008.
Oil prices reached new seven-year peaks on January 28, having climbed for six weeks straight as the political tension in Ukraine exacerbated concerns over tight energy supply.
Brent crude oil rose 0.68% to $90.64 U.S. a barrel in London trading today, not far from Friday's high of $91.70 U.S., while U.S. crude climbed 0.89% to $87.06 U.S.
The Euro currency has declined 1.8% in January to hit its weakest level since June 2020. In early trading today it rose 0.1% to $1.1163 U.S. The American dollar gained versus the safe-haven Japanese yen, rising 1.3% last week and another 0.2% on Monday to 115.51 yen.
