* European stocks drop 1.5 percent as BP (L:BP), UBS add to oil
woes
* Crude futures extend overnight fall on oversupply fears
* Dollar dips vs yen and euro, rises against EM currencies
* Wall Street set to start lower, Exxon results due
By Marc Jones
LONDON, Feb 2 (Reuters) - World stocks ended three days of
gains on Tuesday as lacklustre global economic data led to
another slump in oil prices.
Oil LCOc1 fell 5 percent after dropping as much as 7
percent the previous session, and the glum macro mood left Wall
Street set for 0.9 to 1.1 percent declines after losses in both
Europe .FTEU3 and Asia .MIAPJ0000PUS .
Oil fell after BP announced its biggest loss in 20 years and
plans to cut thousands of jobs, Exxon Mobil (N:XOM) reported its profits
plummeted and S&P cut the ratings of Shell (L:RDSa) and BHP Billiton (L:BLT).
Stocks fell 1.2 to 2 percent in London .FTSE , Frankfurt
GDAXI and Paris .FCHI as oil and gas shares dropped.
Banks .SX7E and Swiss stocks .SSMI also took a bashing.
UBS
wealthy customers were pulling out their money in droves .EU
In the currency markets, waning risk appetite nudged Japan's
yen JPY= and the euro EUR= higher against the dollar,
although another safe haven, the Swiss franc, CHF= EURCHF=
dropped as its central bank said it would intervene to weaken
the franc if necessary.
Sterling reached a three-week high as European Council
President Donald Tusk presented proposals for keeping Britain in
the European Union GBP= . UK Prime Minister David Cameron said
the plans showed "real progress" although there was "more work
to do"
"I don't think the market has much of a clue on what to
focus on," said John Hardy head of FX strategy. "It doesn't seem
too convinced with the narrative of hooray for central bank
liquidity again, and the oil price going down and whole reserve
destruction theme is bad for risk appetite."
The lure of relative safety saw gains for benchmark U.S. and
European government bonds. Euro zone yields got an extra kick
lower from European Central Bank President Mario Draghi's
reiteration on Monday that the ECB may cut rates again next
month GVD/EUR .
Oil still dominated the moves, though. Brent and U.S. crude
LCOc1 CLc1 fell $32.98 and $30.65 a barrel respectively,
having lost as much as 7 percent overnight. O/R
Oil fell amid weak economic data from China, Europe and the
United States and doubts that oil-producing countries will cut
output in the face of a global supply glut O/R . Oil production
in Russia rose to a post-Soviet high in January, the latest
data from its energy ministry showed
"It's hard to see a successful agreement between OPEC and
Russia to cut production, and people are starting to see that,"
said Andy Sommer, senior energy analyst at Axpo Trading in
Dietikon, Switzerland.
EMERGING PRESSURES
In the United States, oil giant Exxon Mobil XOM.N was the
top draw after BP's woes. It is the world's largest publicly
traded oil company, and said it would slash capital spending by
a quarter after its profit halved in the fourth quarter.
Markets appeared little fazed by the results of Iowa's
caucus for the U.S. presidential nomination. Among Republicans,
U.S. Senator Ted Cruz beat Donald Trump. For the Democrats,
former Secretary of State Hillary Clinton was in a virtual tie
with rival Bernie Sanders.
The dollar climbed as much as 1 percent the rouble RUB ,
the rand ZAR= , Mexico's peso MXN= and Malaysia's ringgit
MYR= . Emerging market stocks fell 1.5 percent .MSCIEF after
four days of gains. FRX/EMRG
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS had lost 1.2 percent. Stocks fell
almost everywhere except China .CSI300 , which saw a 2 percent
bounce.
Tokyo's Nikkei .N225 ended down 0.6 percent after two days
of gains following the Bank of Japan's move to negative interest
rates late last week .T . The Australian dollar AUD= also
slipped after the country's central bank kept rates unchanged
but left the door open to further easing reporting by Karin Strohecker; editing by Larry
King)