(MENAFN- AFP) European stocks tumbled on Monday, wiping out gains early in the day spurred by a modest and short-lived rebound in oil prices, as concerns over global crude demand persisted.
Low oil prices and the impact of Western sanctions especially took a toll on Russia, which saw its ruble plummet by 9.5 percent amid warnings of a steep economic contraction of 4.8 percent next year if crude prices do not climb.
After slight increases earlier in the day, Brent North Sea crude for delivery in January was down 44 cents at $61.41 in late London trading. US benchmark West Texas Intermediate (WTI) for January declined sharply, down $1.15 to hit $56.66 in midday trading in New York.
Both had hit their lowest levels since 2009 previously during Monday's trading.
The oil market has now collapsed by 50 percent in value since June, weighed down by plentiful supplies, the stronger dollar and weak demand arising from the struggling global economy.
Renewed worries over oil prices wiped out gains earlier in the day in European stocks, with London's benchmark FTSE 100 index retreating 1.87 percent to end the day at 6,182.72 points.
The Paris CAC 40 fell 2.52 percent to 4,005.38 points, its lowest level since October 20 and its sixth-consecutive drop. In Frankfurt, the DAX 30 lost 2.72 percent to 9,334.01 points.
European equities fell sharply last week as traders tracked the dizzying plunge in oil prices, which hurts the profits of energy companies.
"If ever a reminder was needed that oil is by some distance the most important commodity in the world the last few weeks have provided it," said analyst David Hufton at energy brokerage PVM Oil Associates.
A potential new political crisis in Greece also spooked European markets last week, with concerns over the possibility of snap elections which could jeopardise tough austerity measures.
- 'Dead cat bounce' -
"The move in oil was shown to be a dead-cat bounce and prices rolled over and erased most stock market gains with them," said Jasper Lawler, an analyst at CMC Markets UK.
"After such a sharp drop last week, it's not surprising there wasn't much in the way of confidence to hold onto the morning's share price gains going into the afternoon," he added.
Lawler said "lower oil prices almost unequivocally boost demand in the longer term but the realisation is setting in for markets that part of the reason prices are falling rapidly right now is because global demand is slowing."
In a sign of the ambivalence, stock markets in most Gulf Arab states shed the majority of the gains they made at the start of trading Monday to close lower or flat following days of heavy losses.
Asian markets fell on the back of the low oil price, while investors in Japan shrugged off Prime Minister Shinzo Abe's decisive re-election and focused instead on the faltering economy.
- US industrial production boost -
A strong report on US industrial production in November helped push Wall Street stocks higher in early trading after last week's heavy losses, but markets were back in the red by midday.
The Dow Jones Industrial Average fell 0.71 percent to 17,158.04 points.
The broad-based S&P 500 lost 0.92 percent to 1,983.89, while the tech-rich Nasdaq Composite Index fell 0.99 percent to 4,607.33.
In foreign exchange deals on Monday, the euro stabilised against the dollar, climbing to $1.2460 from $1.2455 late in New York on Friday.
The British pound fell to 79.60 pence to the euro and $1.5655.
Gold was at $1,209.25 per ounce compared to $1.217 late Friday.
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