LONDON—European stocks opened lower Thursday, taking their cue from downbeat U.S. and Asian sessions, after a heavy selloff in energy and metals prices during U.S. trade and amid lingering concerns over European sovereign debt.
London's FTSE 100 Index fell 0.6% at the open, Germany's DAX slid 0.7% to 7439 and Paris's CAC-40 Index slipped 1.1% to 4013.
"Global markets seem to be taking their direction from commodity prices at the moment; last week it was silver and overnight it was the energy complex," said Ben Potter at IG Markets. "Risk appetite has taken a big hit over the last 10 days. As we head into a period of seasonal weakness, one shouldn't be surprised to see the market struggling to make much headway."
Energy prices are likely to be in focus Thursday, after the sector was hit hard during U.S. trading, with crude oil prices falling sharply following data showing a bigger-than-expected jump in crude inventories. Copper, silver and gold also fell sharply. At the same time, a decline in the euro due to worries over Greece and Portugal's finances helped push the dollar higher, adding to pressure on crude, which is inversely correlated with the U.S. currency. Crude oil prices have managed to bounce back from their lows, however. At 0600 GMT, June Nymex crude oil futures were up 21 cents at $98.42 a barrel, while spot gold was at $1499 a troy ounce, down $2.90 from New York.
As far as Greece is concerned, "another general strike by unions yesterday highlights the worries that even if further aid were forthcoming there would be no guarantee that the Greek authorities would be able to implement the extra austerity required in exchange for that aid," said Michael Hewson at CMC Markets.
On the data front, investors will look to the European Central Bank monthly bulletin at 0800 GMT for further clues as to why the bank decided to keep rates on hold at this month's meeting, traders said. Also on the economic calendar, U.K. and euro-zone industrial production are at 0830 GMT and 0900 GMT, respectively. In the U.S., initial jobless claims, the producer price index and retails sales are due at 1300 GMT, while business inventories are at 1400 GMT.
On Wall Street Wednesday, the energy sector pulled stocks lower, with the Standard & Poor's 500 index posting its biggest one-day drop in two months, as crude-oil prices tumbled.
The Dow Jones Industrial Average shed 1% to 12630.03, the Nasdaq Composite declined 0.9% to 2845.06 and the Standard & Poor's 500-stock index lost 1.1% to 1342.08.
Energy prices tumbled Wednesday as a plunge in gasoline futures triggered a five-minute trading halt on Nymex for the first time in two years and dragged June crude oil futures down $5.67 or 5.5% to $98.21 a barrel.
In Asia, stock markets were lower Thursday, dragged by a sharp drop on Wall Street Wednesday. Australia's S&P/ASX 200 dropped 1.3%, Japan's Nikkei Stock Average was down 0.5%, South Korea's Kospi Composite fell 1.3% and New Zealand's NZX-50 was down 0.2%.
In the European foreign exchanges, the euro traded marginally higher against the dollar, despite ongoing worries about Greece and other indebted 'peripheral' euro-zone countries. By 0600 GMT, the euro was trading at $1.4203, from $1.4192 late Wednesday in New York, while the dollar was at ¥81.11 from ¥81.05.
In the bond markets the June bund futures contract was up 0.28 at 124.21.
Write to Michele Maatouk at michele.maatouk@dowjones.com
