Asian stocks extended their decline early Thursday as oil traded close to six-year lows. Energy and commodity shares fell around the world, dragging other stocks.
Japan's Nikkei 225 fell 1.1 percent. The ASX 200 in commodity-dependent Australia dropped 0.7 percent. The STI in trade-dependent Singapore declined 0.5 percent.
In the U.S., the Standard & Poor's 500 closed 0.8 percent down while the Dow Jones Industrial Average and Nasdaq composite each fell about 0.4 percent.
Oil has been trading below $40 a barrel since last week's meeting of OPEC member nations, where Saudi Arabia, the biggest producer, refused to cut production to boost prices. Low oil prices have forced energy companies and their suppliers to cut capital spending and dampened inflation prospects, Bloomberg reported. Some countries, such as Japan, are trying to boost inflation to prompt businesses and consumers to spend now rather than later.
“Today is all about risk-off moves. Oil is still excessively low at this price -- concerns this will be the status quo is making investors avoid risk for now,” said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, as Bloomberg reported.
Slower business and consumer spending is raising doubts about global growth days before the U.S. Federal Reserve is expected to raise interest rates for the first time in nine years, having concluded that the U.S. economy has recovered enough from the 2007-09 recession to take higher rates soon.
“I think the market is starting to be a little bit more concerned about global economic weakness,” said Paul Nolte, senior vice president and portfolio manager at Kingsview Asset Management in Chicago, as reported by Reuters.