Europe midday: Equity markets push lower as oil prices slide

Energy-related shares led European markets lower on Friday as oil prices skidded, with investors looking ahead to the release of key US data.

At midday, the benchmark Stoxx Europe 600 index was down 1.4%, Germany’s DAX was off 1.5% and France’s CAC 40 was 1.2% weaker.

“Once again, equities are drifting lower with investor concern over Chinese growth, dollar strength and continued pressure on commodities,” said Mike McCudden, head of derivatives at stockbroker Interactive Investor.

“Furthermore, there doesn't appear to be much on the table to ignite investor confidence ahead of the Fed's rate decision next week. Despite all and sundry expecting a marginal rate hike, there is still an outside chance they will keep them on hold until the New Year while markets properly assess the on-going global impact from a cooling Chinese economy.”

Shares in China were under the cosh as the yuan dropped to a four and a half year low after the People’s Bank of China guided the currency lower again.

Trading in Fosun International was halted following reports the company’s chairman has gone missing.

The Stoxx 600 oil and gas index was down 2.1%, with West Texas Intermediate 1.4% weaker at $36.26 and Brent crude 1.6% lower at $39.09 after the International Energy Agency cautioned over a drop in demand next year.

The agency said in its monthly report: "Consumption is likely to have peaked in the third quarter and demand growth is expected to slow to a still-healthy 1.2m barrels per day in 2016, as support from sharply falling oil prices begins to fade.”

Oil prices were already depressed as investors bet that the Organisation of Petroleum Exporting Countries’ decision not to curb output will keep the market oversupplied.

Dual-listed insurer Old Mutual and South African-founded bank Investec were still under pressure following the sacking of South Africa’s finance minister Nhalnhla Nene earlier in the week, which weighed on the rand.

Norway’s Statoil nudged lower after announcing a series of transactions with Spain’s Repsol in Norway, the UK, US and Brazil.

On the data front, there are no major Eurozone releases due but in the US, PPI and retail sales are at 1330 GMT. Business inventories and University of Michigan consumer confidence are at 1500 GMT.

“US retail sales should have rebounded powerfully in November, further strengthening the case for a rate hike at next week’s Fed meeting,” said Societe Generale, which forecast a 0.3% month-on-month gain.