EUROPE MARKETS: European Stocks Fall On Stumble In Oil Prices, Central Bank Concerns

By Carla Mozee, MarketWatch Features Dow Jones Newswires

A slide in oil prices and nagging worries about the end of ultraloose monetary policy contributed to pushing European stocks lower Friday.

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The Stoxx Europe 600 fell 0.4% to 378.90, led by oil and gas and consumer services shares. Utility stocks, however, rose.

The benchmark was on course for a second straight loss. Thursday's session ended lower by 0.7% (http://www.marketwatch.com/story/european-stocks-slip-after-fed-minutes-cause-bemusement-2017-07-06) as minutes from the European Central Bank's (http://www.marketwatch.com/story/ecb-considered-abandoning-vow-to-accelerate-qe-2017-07-06) and Federal Reserve's respective meetings in June fueled fears among traders that the easy-money era in monetary policy is starting to come to an end.

Reflecting such concerns, German bund yields on Thursday jumped to an 18-month high as part of a global rout in bond prices. Massive bond buying and other stimulus efforts by major central banks after the financial crisis have helped bolster equity markets worldwide for years.

"European investors remain nervous about the shifting ECB policy stance, even with a rate hike still looking a very distant prospect given subdued core inflation," said Ian Williams, economist and strategist at Peel Hunt, in a Friday note.

Equities have fallen "despite the continuing positive message from the region's economic activity indicators; a clear signal as to just how important monetary policy support remains to the performance of risk assets," said Williams.

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Bank stocks were among those losing ground Friday. Barclays PLC (BCS) (BCS) fell 0.9%, Banco Santander SA (SAN) (SAN) was off 1.1%, Deutsche Bank PLC (DBK.XE) (DBK.XE) leaned back 0.7% and Société Générale SA (GLE.FR) was pulled 0.5% lower.

But the talk about the end of cheap money has pushed the euro above $1.14 this week. On Friday, it bought $1.1420, not far from $1.1424 late Thursday in New York.

Oil: The Stoxx Europe 600 Oil & Gas Index tanked 1.2% as oil prices tumbled nearly 3% on Friday (http://www.marketwatch.com/story/oil-prices-drop-1-volatile-session-2017-07-07). That move followed a spike in prices late Thursday after a much larger-than-expected weekly fall in U.S. crude supplies by 6.3 million barrels. But investors are still grappling with concerns that global supplies aren't falling quickly enough, despite production cuts led by the Organization of the Petroleum Exporting Countries.

In the oil group, producer Tullow Oil PLC (TLW.LN) gave up 3%, Spain's Repsol SA (REPYY) moved down 1.3% and oil services company Petrofac Ltd. (PFC.LN) was pushed 3% lower.

Stock movers: Carrefour SA (CA.FR) fell 4.5%, hurt by worries about profit margins at the French retailer.

Indexes: Germany's DAX 30 fell 0.2% to 12,354.18, France's CAC 40 fell 0.4% to 5,131.44 and the U.K's FTSE 100 fell 0.1% to 7,327.70.

(END) Dow Jones Newswires

July 07, 2017 05:56 ET (09:56 GMT)