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Multiyear Low Crude Oil Triggers Free Fall in European Market

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The entire industry fell on December 11, 2015

As we can see in the below graph, almost all the industries of the SPDR Euro STOXX 50 ETF (FEZ) provided negative returns on December 11, 2015. It shows that investor sentiment turned to panic for the equity and commodity markets.

Crude oil and commodity prices continued to fall, creating a nervousness in the minds of investors. Then investors exited their positions in both the equity and commodity markets, leading to a global sell-off.

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Auto manufacturing industry, the biggest loser in FEZ

The auto manufacturing industry contributed the highest negative return of 4% to FEZ’s performance. Volkswagen (VLKAY), Daimler (DDAIF), and BMW fell 3.5%, 4.5%, and 4%, respectively, on December 11, 2015, as Germany’s monthly exports contracted.

Electrical component and beverage contributed equal negative returns

The electrical component and beverage industries contributed equal negative returns of 3.1% to FEZ on December 11. Schneider Electrical and Anheuser-Busch Inbev (BUD) each fell 3.1% that day.

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Oil and gas industry

The oil and gas industry fell 2.8% on Friday, December 11, 2015. The continued fall in crude oil prices dragged the performance of this industry. The United States Oil ETF (USO) fell 17% over the period of a month. Total (TOT), Repsol, and ENI SpA (EAA) fell 2.9%, 3%, and 2.5%, respectively, on the same day.

Retail sector provided lowest negative return

The retail industry provided the lowest negative return of 0.2% on Friday, December 11, 2015. Retail stock Industria De Diseno provided the lowest negative return of 0.2% to FEZ on the same day.

In the next part, we’ll look at the performances of the stocks that provided FEZ’s lowest negative returns.

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