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Message: <blockquote data-quote="ibnanv" data-source="post: 17685792" data-attributes="member: 218596">Wall Street tailspin spreads to Asian marketsUS crude oil dropped below $50 a barrel for the first time in five and a half years, sending energy stocks into a tailspin and fuelling a broader sell-off on Wall Street that spilled into Asia as fears grew of a global economic slowdown.The dollar strengthened against a basket of rivals to a nine-year high, while the euro sank to a nine-year low versus the US currency.The  nervous start to the year for financial markets reflected mounting  fears that the world was facing the twin threat of slower growth and  deflation, combined with worries about the impending Greek elections and  the speed of the oil price fall.The nervous mood in the US and Europe spread to Asia on Tuesday  morning, with Japan’s Nikkei 225 falling 1.8 per cent in the first  minute of trading and South Korea’s Kospi Composite losing 1.2 per cent.In the US, investors sought long-dated government bonds as insurance  against further downward pressure on inflation and global growth  prospects with the US 30-year Treasury bond at its lowest yield since  August 2012.The slump in oil prices helped drag German consumer inflation down to 0.1 per cent in the year to December.As deflationary pressures intensify in the eurozone, Mario Draghi, the head of the European Central Bank is expected to launch a programme of government bond-buying as a means of boosting inflation expectations.“The deflationary fear is growing, we are seeing slower global trade,  oil and industrial commodities keep falling and the eurozone faces a  major challenge in undertaking aggressive easing,” said John Brady,  managing director at RJ O’Brien.The sell-off in stocks had gathered pace on Monday, pushing the  Eurofirst 300 index down 2.3 per cent, the UK FTSE 100 lower by 2 per  cent while the S&P 500 closed 1.8 per cent lower. Across share markets, oil companies led losses as BP tumbled 5.1 per cent, Royal Dutch Shell declined 4.8 per cent and France’s Total 6 per cent, while Eni of Italy was down 8.4 per cent. In New York, ExxonMobil was 2.7 per cent lower and Chevron 4 per cent weaker. This will put the focus on the sector in China, where stock markets  open at 9.30am, after a strong rally on Monday that saw energy stocks  shoot up nearly 10 per cent. Futures suggest Hong Kong’s Hang Seng Index  will fall 1 per cent when it opens.Both Brent, the international oil benchmark, and West Texas  Intermediate, the main US crude, hit levels last seen in the spring of  2009. They have now fallen more than 50 per cent since mid-June. “We  may not quite have reached a price level sufficient enough to clear the  market surplus altogether,” said David Fyfe, head of research at  Gunvor, a Geneva-based trading house. “Prices may weaken a bit further.”  <img src="http://im.ft-static.com/content/images/0bd0a89c-9504-11e4-b32c-00144feabdc0.img" alt="" class="fr-fic fr-dii fr-draggable " style="" />Brent  hit a low of $52.66 a barrel in New York afternoon trading before  closing at $53.11 a barrel, down $3.31. Meanwhile WTI slid $2.65 to  $50.04 a barrel, having earlier breached $50 a barrel. The euro dropped to $1.1864 in early trading,  surpassing even the lows reached during the eurozone debt crisis. The  decline followed a story in Der Spiegel, the German news magazine, that  Chancellor Angela Merkel was prepared to abandon her commitment to keeping Greece in the currency bloc should the anti-austerity Syriza party take power in this month’s general election and reverse the country’s reform programme.<img src="http://im.ft-static.com/content/images/0984e8dc-9504-11e4-b32c-00144feabdc0.img" alt="" class="fr-fic fr-dii fr-draggable " style="" />Germany  denied the report and insisted that it was working on the assumption  that Athens would continue to fulfil its obligations to international  creditors.Market analysts predict further volatility in European assets this  month ahead of the ECB’s first monetary policy meeting of the year and  the Greek elections.“There has been a reawakening of ‘Grexit’ fears,” said Alan Ruskin, a  foreign exchange strategist at Deutsche Bank. “Grexit uncertainty could  easily persist for the next month, weighing on the euro.”Others say the uncertainty could last far longer. “2015 is a  make-or-break year for Europe,” said Alberto Gallo of Royal Bank of  Scotland.</blockquote>

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