Europe Stocks driving sharply lower on Global Shares selloff

European stocks dropped Thursday, with risk-averse investors fleeing equities around the world, but energy shares managed to post gains as airstrikes in Yemen sent oil prices flying higher.

The Stoxx Europe 600 SXXP, -1.39% dropped 1.3% to 392.85, on track for its biggest loss since mid-January, according to FactSet data.

Energy shares, however, stood out, rising on the back of a 5% surge in oil prices CLK5, +4.27% after reports of Saudi Arabian airstrikes in Yemen spurred concerns about supply disruptions. Topping the Stoxx 600, shares of offshore driller Seadrill Ltd. SDRL, +3.54% climbed 3.3%, oil-field services provider Petrofac Ltd. PFC, -0.20% rose 3% and Portuguese oil firm Galp Energia SGPS GALP, +1.01% gained 2.1%.

But overall, “European markets are trading lower on the back of the sharp selloff which we experienced in the U.S.,” on Wednesday, said Naeem Aslam, AvaTrade’s chief market analyst, in a Thursday note. “Investors are finding it difficult to assess the health of the U.S. economy given that the recent raft of economic data has been very disappointing.”

Concerns about a poor upcoming corporate earnings seasons also contributed to Wall Street’s dive overnight. Most Asian stock markets followed up with losses on Thursday.

Among the major European indexes, Germany’s DAX 30 DAX, -1.44% sank 2% to 11,634.71 and France’s CAC 40 PX1, -1.21% tumbled 1.4% to 4,952.26.

In Spain, the IBEX 35 IBEX, -0.81% dropped 1.4% to 11,312.20 and Italy’s FTSE MIB FTSEMIB, -1.52% was pushed 1.8% lower to 22,735.82.

European stocks in recent sessions have pulled back from multiyear and record highs, in part as the euro EURUSD, +0.26% regains ground against the U.S. dollar. The dollar’s strong run this year has taken a breather since the Federal Reserve signaled last week it may begin raising interest rates later than the market had expected.

A rate hike by the Fed will be data dependent and if there’s a “consistent pattern” of disappointing reports, a “rate hike is completely out of question. In fact another pipeline for QE could be established,” said Aslam.

The U.K.’s FTSE 100 UKX, -1.22% fell 1.3% to 6,901.34, with London Stock Exchange Group PLC LSE, -8.71% shares down nearly 10% after the company’s largest shareholder sold its entire stake in the company.

Source: MarketWatch