Stocks seen lower on crude oil spike, weak global cues

Equities are seen lower on Tuesday tracking weak global markets as concerns on the long-term implications of the $700 billion bailout plan worried investors. Crude also raised its ugly head thus reviving concerns on consumer spending and resurfacing inflation woes.

Oil prices soared to an intra-day high of $130 a barrel on Monday, before easing, in a rally sparked by the expiry of the front-month futures contract and weakness in the US dollar. US light crude for November delivery was down 42 cents at $108.95 a barrel.

The Dow Jones Industrial Average dropped 372.75 points, or 3.27 per cent, to 11,015.69, the Standard & Poor's 500 Index slid 47.99 points, or 3.82 per cent, to 1,207.09 and the Nasdaq Composite Index fell 94.92 points, or 4.17 per cent, to 2,178.98.

Asian markets also declined after oil prices jumped by a record and on renewed concerns that the US financial industry bailout would not prevent a recession. The Hang Seng fell 2.82 per cent, Straits Times shed 2.45 per cent and the CSI 300 Index tumbled 3.66 per cent. Japanese markets are closed on Sep 23 for the autumn equinox national holiday.

Back home, indices opened with a gap up Monday tracking buoyancy in global markets but soon pared gains. Lack of conviction in the market saw benchmarks oscillating between positive and negative terrain, gave in after weak opening of European markets.