As anticipated, a fresh weakness in oil prices slashed the gains in the Asian session. All the major Asian indices finished the day steeply lower. China’s Shanghai SE Composite Index took the worst beating as it closed the day nearly 6.50% lower at 2,749.79. Japan’s Nikkei 225 followed the trail, losing 402.01 points or 2.35% to settle at 16,708.90. There has been mounting pressure on Japan’s central bank to adopt stimulus measures in view of the persisting weakness.

Oil back in pressure

The agony for global markets resumed as the U.S. crude futures re-entered sub-$30 zones adding to previous day’s 6% fall. Global benchmark Brent is also trading near $30 level, signalling weakness in oil prices. Hong Kong’s Hang Seng fell 2.48% to 18,860.80.

At the same time, the European markets have also brushed off the Central Bank’s assurance of more monetary easing measures as major indices hit red today. The inability of oil prices to remain above $30 level, combined with an ongoing slowdown in China are the key factors driving weakness across the global markets.

U.S. market development

This is reflective in the European markets, where France’s CAC 40 was down by 1.57% or 67.53 points to 4,243.80. Euronext 100 dipped 1.46% to 838.55. A weak business sentiment in Germany sent its index DAX down by 1.29% to 9,610.25 but has since recovered to 9722. The region’s IFO survey data pointed that the business sentiment index fell to 107.3 from 108.6 in December.

Back in the U.S., the scenario was no different as Dow Jones Industrial Average took a steep plunge by nearly 208 points to close at 15,885 in previous day’s session. S&P 500 Index declined by 1.56% to 1,877.08. The key factor that will drive the U.S. markets this week will be the Federal Reserve’s policy meet, which will conclude on Wednesday. Based on the global sentiment, most of the analysts have projected that the Fed will announce rate hikes at a slower pace than earlier estimated.