European Stocks driven Lower on Global Shares Selloff
European stocks dropped onThursday, as risk-averse investors fled equities around the world, even bringing down energy shares despite a rally in oil prices spurred by tension in the Middle East.
The Stoxx Europe 600 SXXP, -0.86% dropped 0.9% to 394.85, the lowest close since March 10. The fall reduced the pan-European benchmark’s gain for the year to 15.2%.
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Gains for most energy shares SXEP, -0.46% eventually fizzled, despite a surge in oil prices CLK5, +3.96% as reports of Saudi Arabian airstrikes in Yemen spurred concerns about supply disruptions. But managing to advance was offshore driller Seadrill Ltd. SDRL, +1.74% as it climbed 1.8%. Norwegian oil major Statoil ASA rose 1.2% and Dutch oil services provider Royal Vopak NV VPK, +1.68% picked up 1.7%.
But overall, European markets traded 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 Thursday, Germany’s DAX 30 DAX, -0.18% fell 0.2% to 11,843.68, but closed off session lows. France’s CAC 40 PX1, -0.29% fell 0.3% to 5,006.35.
Italy’s FTSE MIB FTSEMIB, -1.06% was pushed 1.1% lower to 22,900.27. Spain’s IBEX 35 IBEX, -0.10% ended 0.1% lower at 11,453.80.
European stocks in recent sessions have pulled back from multiyear and record highs, in part as the euro EURUSD, -0.91% 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, -1.37% fell 1.4% to 6,895.33, with London Stock Exchange Group PLC LSE, -5.63% shares down more than 5% after the company’s largest shareholder sold its entire stake in the company.
Greek stocks finished lower, leaving the Athex Composite GD, -3.74% down 3.7% at 764.88. Earlier Thursday, central bank data showed Greek bank deposits sank to their lowest level in nearly 10 years, highlighting worries about the country’s debt crisis and the country’s possible exit from the eurozone.
The ECB on Wednesday raised the amount of money Greek banks can borrow under an emergency lending program, to €71.1 billion ($77.8 billion) from €69.8 billion the previous week.
Source: MarketWatch
