European index on track for its worst month since 2016

World stock markets continued a week-long sell-off on Friday as the threat of a U.S. government shutdown and further hikes in U.S. borrowing costs compounded investor anxiety that global economic growth is slowing.

MSCI’s index of global equities fell 0.1 percent, dragged down by broad declines in Europe and Asia. On Wall Street, U.S. stocks moved higher after Commerce Department data showed the U.S. economy is on pace to grow by 3 percent this year .

Despite the early gains on Wall Street, investor sentiment remained cautious. The Nasdaq has shed 19.5 percent from its August peak, just shy of confirming a bear market, while broad stock markets in the United States and Europe are on pace for the worst quarter since the financial crisis in late 2008.

The pan-European STOXX 600 index closed up 0.03 percent, after testing lows not seen since November 2016 earlier in the session. Still the index was on track for its worst month since 2016 amid lingering worries about slowing corporate earnings and economic growth.

Adding gloom to the European banking sector, which has fallen 28.5 percent so far in 2018, Danske Bank at the center of an international investigation into alleged money laundering, cut its 2018 outlook for the second time this year. The Danish lender was down 0.8 percent.

U.S. President Donald Trump has refused to sign legislation to fund the U.S. government unless Congress authorizes money for a Mexico border wall, thus risking a partial federal shutdown on Saturday.

Japan’s Nikkei lost 1.1 percent to close at its lowest since mid-September last year, after giving up 5.6 percent this week. Australian stocks slipped 0.7 percent, hovering just above a twoyear trough hit earlier in the session.

Oil prices, which slid just over 4 percent on Thursday, tumbled to their lowest since the third quarter of 2017. U.S. crude fell 1 percent to $45.44 a barrel, while Brent fell 2.3 percent to $53.10.