Europe open: Stocks slip as oil prices slide

European stocks slipped in early trade following a mixed session in Asia, as oil prices declined and investors awaited fresh catalysts at the start of a shortened trading week.

At 0850 GMT, the benchmark Stoxx Europe 600 index and Germany’s DAX were both down 0.2%, while France’s CAC 40 was 0.5% lower.

Oil prices were in the red after data from driller Baker Hughes showed US energy companies last week added one oil rig to 387 following three months of cuts.

West Texas Intermediate was down 1.8% to $38.72 a barrel while Brent crude was 1.3% lower at $40.66.

The Stoxx 600 oil and gas index fell 1.6%, while the corresponding sub-index for basic resources was 2% weaker as copper prices lost ground.

“After the carnage experienced by equity markets at the start of the year, the significant rebound that started in mid-February is beginning to take markets back into positive territory. Led by last year's biggest losers, mining and oil companies have been the front runners in the recovery and remain a key driver in sentiment,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.

She noted that the US has been the most resilient major market, with the S&P finally reaching positive territory for 2016 on Friday. In Europe and Japan, meanwhile, equity weakness has been offset by unexpected currency strength.

“The big question for investors is where markets go from here? Should those investors who have hung on through Q1's roller-coaster ride now cut and run? Or, with the Fed taking a more dovish approach to prospective rate hikes that puts it more closely in line with the monetary support still being offered by the European Central Bank and the Bank of Japan, is there scope for further gains in the months ahead?”

In corporate news, Telecom Italia was in the black after it confirmed that chief executive Marco Patuano was set to leave the company.

Bayer was also on the front foot after Reuters cited people familiar with the matter as saying that seed producer Monsanto had approached the company to express interest in its crop science unit, including a potential acquisition worth more than $30bn.

French insurer AXA was little changed after it said chairman and chief executive Henri de Castries will step down in September after nearly 17 years at the helm.