By Peter Nurse
Investing.com -- European stock markets traded lower Friday, following the broad sell-off on Wall Street overnight as investors fretted that aggressive central bank tightening will severely curb economic growth.
By 4 AM ET (0800 GMT), the DAX in Germany traded 0.8% lower, the CAC 40 in France fell 1.1%, and the U.K.’s FTSE 100 dropped 0.5%.
German industrial production slumped in March, falling 3.9% on the month, illustrating the difficulties the Eurozone’s largest economy has had coping with the pandemic restrictions and the war in Ukraine.
The last time there was a sharper decline was at the beginning of the coronavirus crisis in April 2020.
Yet, despite this evidence of slowing growth, the head of Germany's Ifo institute said Friday that the European Central Bank must quickly raise interest rates to combat high inflation in the Eurozone.
This follows the Federal Reserve raising the benchmark interest rate by a half-point on Wednesday, its biggest hike in two decades, and the Bank of England following suit on Thursday, hiking by 25 basis points to the highest level since 2009.
All three main Wall Street benchmarks closed sharply lower Thursday, with the blue chip Dow Jones Industrial Average falling more than 1,000 points, or 3.1%, its worst daily performance since October 2020.
The tech-heavy Nasdaq Composite fell 5%, its biggest one-day percentage decline since June 2020 and its lowest finish since November 2020.
In corporate news, IAG (LON:ICAG) stock slumped 9% after the parent of British Airways and Iberia posted another substantial operating loss of 731 million euros ($770 million) in the first quarter, hit by the winter wave of Omicron-variant COVID-19 which also caused widespread staff shortages.
However, the report wasn't all bad news, as the company expects to return to profit in the current quarter and stay profitable for the rest of the year.
Adidas (H:ADSGn) stock fell 5.8% after the German sportswear company cut its 2022 guidance as renewed COVID-19-related lockdowns in Greater China continue to weigh.
ING (AS:INGA) stock fell 1.8% as the Dutch bank reported a disappointing first-quarter profit, with its earnings hit by hefty provisions at its wholesale banking division.
Elsewhere, the major economic release Friday comes from the U.S., with the monthly official jobs report likely to be studied carefully for clues on labor market strength and the likely impact on monetary policy.
Oil prices edged higher Friday, climbing for the third straight session, on persistent concerns over the tightness of global supply, particularly with the European Union, the world's largest trading bloc, set to phase out imports of Russian oil.
By 4 AM ET, U.S. crude futures traded 0.4% higher at $108.67 a barrel, while the Brent contract rose 0.4% to $111.37. Both benchmarks are on track to rise for a second week in a row.
Additionally, gold futures fell 0.1% to $1,873.55/oz, while EUR/USD traded 0.2% lower at 1.0522.