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Euro zone government bond yields held near record lows, as the falling energy prices pulled down consumer price growth across the bloc and raised the chances of more stimulus from the European Central Bank on increased deflation fears.
Brent crude oil steadied above $73 a barrel, after falling to $71.12, while US crude fell six per cent to below $70 a barrel. Investors said OPEC's decision, in tandem with higher US output, would leave oil markets heavily oversupplied. "We are seeing continued oversupply," said Bill Hubard, chief economist at Markets.com. "I think $70 a barrel will be the new norm. We could see oil go considerably lower."
The European oil and gas sector fell 3.8 per cent, while the S&P Energy index fell 5.8 per cent. The energy index in Europe has lost $240 billion in market value since late June, more than the market cap of Royal Dutch Shell, Europe's biggest oil major, Thomson Reuters data show.
"At $72 a barrel, we're well below the pain threshold for many companies in the sector, as well as many exporting countries such as Iran, Libya or Russia," said Alexandre Baradez, IG France's chief market analyst. The pan-European FTSEurofirst 300 fell 0.26 per cent to 1,388.77, while MSCI's all-country world equity index fell 0.24 per cent to 426.28.
The Dow Jones industrial average rose 44.9 points, or 0.25 per cent, to 17,872.65. The S&P 500 fell 0.18 points, or 0.01 per cent, to 2,072.65.
