Plunging oil prices hit European stock markets
LONDON: European equity markets sank Friday, with the energy sector reeling as world oil prices plummeted to fouryear lows following OPEC's decision to hold output.
With US financial markets shut on Thursday for Thanksgiving, traders continued to focus on the outcome of this week's OPEC oil cartel meeting.
In midday deals, London's benchmark FTSE 100 index fell 0.63 percent to 6,681.56 points, the Paris CAC 40 shed 0.48 percent to 4,361.59 and Frankfurt's DAX 30 lost 0.34 percent to 9,941.27 points compared with Thursday's close.
The 12-nation Organization of Petroleum Exporting Countries (OPEC) decided Thursday to maintain its output ceiling at 30 million barrels per day, where it has stood for three years, sending prices plunging in an oversupplied market.
London Brent oil for January delivery sank early on Friday to $71.12 per barrel -- hitting the lowest level since July 7, 2010.
US benchmark West Texas Intermediate for January meanwhile had slumped to a fouryear trough at $67.75.
"The effects of yesterday's OPEC decision to maintain its oil output is still working its way through the markets today," said analyst Alastair McCaig at trading firm IG.
"The template for equity markets today has been clear from the beginning. Oil and energy manufacturers are down, while those companies that are oil consumers are up."
In London, shares in British oil major BP slid 3.39 percent to 411.75 pence, and rival Royal Dutch Shell saw its 'B' share price drop 3.22 percent to 2,192.5 pence.
In Paris, French oil and gas giant Total shed 3.57 percent to 44.24 euros.
Slumping oil prices weigh on the energy sector because they eat into company profits.
At the same time, they also boost airline earnings because they slash the cost of jet fuel or kerosene, which is refined from crude.
Air France-KLM shares in Paris had rallied sharply by more than six percent in early Friday deals, but fell back into the red on profit-taking.
Nearing midday, Air FranceKLM was 3.98 percent lower at 12.78 euros.
British no-frills airline EasyJet meanwhile saw its shares climb 0.55 percent to 1,642 pence in London.
ETX Capital analyst Daniel Sugarman noted that "the drop in oil price means cheaper running costs" for airlines.
However, shares in International Airlines Group, parent of British Airways, were 0.11 percent lower at 457.3 pence.-Agencies