Europe open: Stocks mostly lower on weak China cues; BHP slumps

European stocks were mostly lower in early trade following a steep decline in Chinese markets, as oil prices slid.

At 0855 GMT, the benchmark Stoxx Europe 600 index was down 0.4%, France’s CAC 40 was 0.3% weaker and Germany’s DAX was up 0.1%.

“It will be very interesting to see how investors respond today ahead of the weekend. Strong risk aversion ahead of the weekly close is a clear vote of no confidence in the markets, which doesn’t bode well for the coming weeks,” said Craig Erlam, senior market analyst at Oanda.

“It may suggest that rather than seeing stabilisation this week, what we’ve actually witnessed is the calm before the storm. I’m sure this will largely be determined by how Asian markets open next week.”

The Shanghai Composite index fell 3.5%, closing in bear market territory, while Hong Kong’s Hang Seng slid 1.5%. A bear market is when the price of an asset drops 20% from its peak.

Figures out earlier showed Chinese banks gave 597.8bn yuan in new loans in December down from 708.9bn the previous month and prompting more worries about the state of China’s economy.

Oil prices were under pressure again, having rebounded on Thursday after a brief dip below $30 a barrel. West Texas Intermediate was down 2.7% at $30.35 a barrel and Brent crude was off 2% at $30.25.

In corporate news, French supermarket operator Carrefour was a touch weaker after its fourth quarter revenue met analysts’ expectations.

Miner BHP Billiton slumped after saying it expects to book a $7.2bn (£5m) impairment charge on the value of its onshore US assets in its half-year results due to the steep drop in oil prices.

On the upside, Swedish clothing retailer Hennes & Mauritz was in the black after posting a 10% rise in December sales.

In London, BT Group rose after the Competition and Markets Authority approved its plans to acquire EE.

Shares in French supermarket group Casino rose after the company said it will sell its majority stake in Thai hypermarket operator Big C Supercenter.

On the macroeconomic front, Eurozone trade balance figures for November are at 1000 GMT. In the US, Empire manufacturing and retail sales are at 1330 GMT, while industrial production is at 1415 GMT and business inventories at 1500 GMT, along with University of Michigan sentiment.