Europe open: Stocks in the red as BP, UBS slump

European stocks fell in early trade, with investors digesting disappointing results from BP and UBS as oil prices slid.

At 0910 GMT, the benchmark Stoxx Europe 600 index was down 1.6%, France’s CAC 40 was 1.7% lower and Germany’s DAX was off 1.3%.

“Equity markets on the back foot this morning, with a backtracking in the oil price (yes equities and oil still excessively correlated) and weak China/US macro data weighing on the recent stock market recovery,” said Mike van Dulken, head of research at Accendo Markets.

“Weak results from BP are weighing on the energy sector, adding to S&P's cuts yesterday evening to ratings and outlook on several major commodities names.”

BP fell sharply after the oil giant reported a fourth quarter loss of $3.31bn, with underlying profits down a whopping 91% to $196m. The company posted an annual loss of $6.5bn, which was its worst in 20 years.

The Stoxx 600 oil and gas index was 3.3% weaker in early trade.

Swiss bank UBS was also firmly under the cosh after pre-tax profit at its investment bank came in weaker than expected.

Alfa Laval AB slumped after the Swedish engineering group’s fourth-quarter pre-tax profit fell short of expectations.

German chip maker Infineon Technologies was also in the red after its first quarter results disappointed.

On the upside, Danske Bank A/S advanced after the Danish lender lifted its dividend and announced a share buyback plan.

Supermarket retailer Sainsbury’s rose after it agreed an offer with Home Retail that values the FTSE 250 group at about £1.3bn. Home Retail shares edged higher on the announcement.

Oil prices were in the red again as investors became less hopeful of a deal between OPEC and non-OPEC nations to cut production, with West Texas Intermediate down 2% at $30.98 and Brent crude down 1.6% at $33.68.