US open: Equities track declines in Europe ahead of ECB meeting

US stocks tracked declines in Europe on Monday, snapping three weeks of gains despite a rebound in oil prices.

At 1430 GMT, the Dow Jones Industrial Average fell 0.24%, the S&P 500 shed 0.45% and the Nasdaq lost 0.55%.

An increase in oil prices did little to boost equities with Brent crude rising 1.14% to $39.17 per barrel and West Texas Intermediate increasing 1.18% to $36.35 per barrel at 1424 GMT.

“This afternoon will likely see US markets replicate the aimless moves witnessed in Europe so far this morning,” said Chris Beauchamp, senior market analyst at IG.

“The temptation to go short after such a strong bounce remains high, especially given the close below 2000 on the S&P 500 on Friday, but beneath the surface investors still don’t seem confident about the longevity of the rally. This, therefore, is perhaps the strongest argument as to why we will go higher from here.”

There are no major data releases due on Monday but investors will keep a close eye on speeches from Federal Reserve vice chair Stanley Fischer and Fed governor Lael Brainard later in the day for any clues on the health of the US economy ahead of the rate decision on 16 March.

The main regional indices in Europe were on the back foot as investors booked some profits following recent gains and shifted their focus to the European Central Bank rate announcement on Thursday.

The market is pricing in a 13 basis points deposit facility cut, a six-month extension of the quantitative easing programme and a €10bn increase in the pace of monthly asset purchases.

Adding to investors' nervousness before the ECB meeting, the Bank of International Settlements (BIS) said markets were losing faith in the “healing powers” of central banks to support the global economy.

Head of the BIS monetary and economics department, Claudio Borio, said in the Swiss-based bank’s latest quarterly report that central banks are running out of tools to tackle sluggish growth as interest rates are taken negative. Bario added that mounting debt, particularly in emerging markets, pointed to a "gathering storm".

"The latest turbulence has hammered home the message that central banks have been overburdened for far too long post-crisis," Borio said.

"We may not be seeing isolated bolts from the blue, but the signs of a gathering storm that has been building for a long time."

In Asia, China’s National People's Congress (NPC) cut its economic targets over the weekend to between 6.5% and 7%. This was down from last year’s target of around 7%.

The Nikkei 225 closed in the red but China’s Shanghai Composite ended up after officials outlined plans to bolster the country’s flagging growth.

On the corporate front, DuPont gained following media reports BASF is considering a counterbid for the US firm, which agreed a merger with Dow Chemical last year.

Micron Technology shares dropped after Nomura cut its rating on the stock to ‘reduce'.