European equities drop in global selloff; oil in retreat

European stock markets sank Friday, with sentiment rattled by fresh Wall Street losses and US tech-sector woes, while oil prices and bitcoin also dipped before the weekend as investors sought safety, dealers said.

London equities slid 1.1 percent just after midday in the British capital, while Frankfurt and Paris dived 1.8 percent and 1.6 percent respectively in early afternoon eurozone deals.

New York slumped once more Thursday on the prospect of several US Federal Reserve interest rate hikes this year, while Asia mostly languished in the red ahead of the weekend.

Oil prices retreated from recent seven-year highs on news of rising US crude inventories, which indicates weaker demand in the world’s top consumer.

Bitcoin fell below $39,000, sitting far below last November’s record of almost $69,000.

– Global shockwaves –

“Risk-off sentiment and a sell-off on Wall Street are sending shockwaves across global markets,” said Interactive Investor Victoria Scholar.

Sentiment took another knock as US entertainment streaming giant Netflix reported cooling 2021 subscriber growth in after-hours results, having boomed during Covid lockdowns on surging demand from home-bound consumers.

The news came after Peloton’s shares tumbled Thursday on a report that the US fitness firm planned to suspend production of bikes and treadmills on falling consumer demand.

US tech firms also remain under pressure because dealers argue they are more susceptible to higher borrowing costs than many other companies.

“Tech carnage continues (and) stock markets continue downwards spiral,” noted Markets.com analyst Neil Wilson.

He warned that “wild swings are catching many offside”, noting there was a “broad mood against pandemic bubble winners” like Netflix and Peloton.

Angst about the Fed’s determination to fight surging inflation by removing its ultra-loose monetary policy is dealing a severe blow to the rally in global markets that has run virtually uninterrupted for nearly two years, leaving most markets in the red at the start of 2022.

Officials have started tapering the massive bond-buying put in place at the start of the coronavirus pandemic and it is widely expected they will start lifting borrowing costs from March, though by how much is a matter of speculation.

The Fed has also said it will begin offloading the bonds it already has on its books, which have been key in helping keep rates low, though it is not clear how quickly it will do that.

Markets are now awaiting the Fed board’s meeting next week, hoping it will provide a clear idea about its timetable for policy normalisation.

Traders are also keeping a nervous eye on Ukraine, where Russia’s troop build-up is fanning fears Moscow is planning an invasion.

– Key figures around 1200 GMT –

London – FTSE 100: DOWN 1.1 percent at 7,502.37 points

Frankfurt – DAX: DOWN 1.8 percent at 15,628.06

Paris – CAC 40: DOWN 1.6 percent at 7,080.82

EURO STOXX 50: DOWN 1.5 percent at 4,234.91

Tokyo – Nikkei 225: DOWN 0.9 percent at 27,522.26 (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 24,965.55 (close)

Shanghai – Composite: DOWN 0.9 percent at 3,522.57 (close)

New York – Dow: DOWN 0.9 percent at 34,715.39 (close)

Euro/dollar: UP at $1.1333 from $1.1312 late Thursday

Pound/dollar: DOWN at $1.3556 from $1.3600

Euro/pound: UP at 83.58 pence from 83.17 pence

Dollar/yen: DOWN at 113.83 yen from 114.11 yen

Brent North Sea crude: DOWN 1.4 percent at $87.17 per barrel

West Texas Intermediate: DOWN 1.5 percent at $84.29 per barrel

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