Europe open: Stocks in the red as oil slides after failed Doha meeting

European stocks dropped in early trade, led lower by energy issues as oil prices slid after OPEC and non-OPEC producers failed to reach an agreement on a production freeze at Sunday’s meeting in Doha.

At 0855 BST, the benchmark Stoxx Europe 600 index was down 0.6%, Germany’s DAX was off 0.4% and France’s CAC 40 was 0.7% weaker.

At the same time, oil prices were firmly in the red. West Texas Intermediate was down 4.7% to $38.47 a barrel while Brent crude was 4.4% lower at $41.20.

The Stoxx 600 oil and gas index fell 2.5%. Basic resources were also under pressure as metals prices declined, with the sub-index for that sector down 1.6%.

“European equity markets are starting the new trading week on a decisively negative note this morning as important oil talks in Doha ended without an agreement yesterday concerning freezing oil output,” said Markus Huber, a trader with broker City of London Markets.

“Somewhat intensifying this morning's sell-off is the fact that many major equity indices failed to take out important resistance levels on Friday leading to profit taking early on today. Still it needs to be seen if sentiment has indeed shifted to negative or if lower prices can tempt investors back into the market as the day progresses.”

Sunday’s meeting of oil producers in Doha, Qatar, failed to result in the production freeze deal market participants had been hoping for.

Ahead of the summit, investors had been expecting the oil producers, which include Saudi Arabia and non-OPEC Russia, to agree to cap production at January levels after Russia, Saudi, Qatar and Venezuela said in February that they would if other producers joined them.

However, Iran – which had already made it clear it would not freeze or cut production until it recovered a market share similar to what it had before sanctions were imposed – did not send a representative to the meeting.

Saudi Arabia, meanwhile, insisted it would not freeze production if Iran did not participate.

In corporate news, energy supplier Centrica was on the back foot after it said it had lost another 1.5% of its home energy accounts in the first quarter and plans to cut around 3,000 jobs this year.

Spain's Caixabank was weaker after it launched a full takeover bid for Portugal's BPI.

On the upside, Reckitt Benckiser was a little higher after reporting a rise in first-quarter revenues and affirming its full-year forecasts.

Travel operators Thomas Cook and TUI were both on the front foot after Berenberg upgraded its ratings on the stocks.