Oil Slump Causes Global “Bear Market”

Global stock markets are in a ‘bear market’ as Wall Street shares fell as a result of the decline in oil prices, with the Dow Jones and S&P 500 indexes falling by 1.56% and 1.2%.

A bear market is a market situation in which share prices are falling, thereby encouraging selling.  

According to the BBC, the financial outlook is so bleak that the FTSE 100 index has fallen by more than US$560 billion since April 27, 2015.

The FTSE is the index for the top 100 performing companies on the London Stock Exchange.

Laura Lambie, senior investment director at Investec Wealth Investment, said: “Investors have decided the world is a riskier place. There's been a short-term change in sentiment”, adding that the main concerns for investors are rising US interest rates and the fall in oil prices.

The stock market decline follows recent news that the price of oil had fallen to $27.67 per barrel, which is the lowest figure recorded since 2003.

According to the Wall Street Journal, the price of oil has since fallen to below $27 per barrel.

Maersk chief Nils S. Andersen recently spoke of the global oil situation and stated the similarities between it and the container trade.