Europe shares close sharply lower as EM concerns weigh
European equities closed sharply lower on Friday as a large sell-off in emerging-market currencies spooked investors.
The pan-European FTSEurofirst 300 Index provisionally closed lower by 2.4 percent at 1,300.16 points, with the index posting its biggest weekly decline since mid-December.
U.S. stocks also fell sharply on Friday, with the Nasdaq Composite slipping into negative on the year, with investors across the pond also concerned by the goings-on in emerging markets.
Asian equities closed mostly lower on Friday, as Thursday's contractionary reading on HSBC's flash Chinese Purchasing Managers' Index (PMI) weighed on trading sentiment.
Emerging market worries
Aberdeen Asset Management was one of the biggest fallers in Europe on Friday, with shares closing down 5.7 percent, after Morgan Stanley cut the group from equalweight to underweight. Furthermore, the group was affected by its exposure to emerging markets, after Argentina's central bank abandoned its policy of supporting its currency.
Emerging market currencies took a beating on Friday amid growing concerns about the U.S. Federal Reserve's monetary guidance. The U.S. central bank has promised that it will not raise interest rates until unemployment falls to 6.5 percent — but some analysts are concerned that rate hikes could come sooner than expected.
Tim Ash, head of emerging market research at Standard Bank, said people had fallen out with emerging markets.
"The story is about fundamentals — so many emerging markets have dodgy fundamentals," he told CNBC. "You've got Turkey, Brazil, Argentina, Egypt — everyone's got problems."
In Europe, Spanish stocks were among the worst hit, with Madrid's IBEX benchmark dropping 3.5 percent, led by Telefonica, which closed down 4.5 percent. Spanish banks were also poor performers, with BBVA closing down 5.1 percent and Banco Santander, down 3.5 percent.
(Read more: Emerging market currencies take a battering)
In stocks news. the Nikkei business daily reported on Friday that Nissan and Renault will combine their manufacturing and research functions in a move that will save the alliance more than 400 billion yen ($3.86 billion) a year. Shares in Renault closed lower by 4.9 percent.
German pharmaceutical company Celesio saw shares rise by 3.8 percent after U.S. drugs distributor McKesson succeeded in its second attempt to win control of its German peer. McKesson, the largest U.S. drugs wholesale group, said late on Thursday it had secured ownership of about 75 percent.
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