Europe open: Stocks nudge lower as investors keep an eye on oil

European stocks edged lower in early trade, with investors cautious as oil prices remained below $40 a barrel and the yuan slumped to four and half year lows.

At 0900 GMT, the benchmark Stoxx Europe 600 index and Germany’s DAX were both 0.3% weaker, while France’s CAC 40 was down 0.4%.

“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 0.9%, with West Texas Intermediate 0.1% weaker at $36.71 and Brent crude 0.2% lower at $39.64 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 are at 1500 GMT.