European stocks close flat after global rout

  • The pan-European Stoxx 600 index closed flat at the end of a big week of losses.
  • On a weekly basis, Europe's main blue chip benchmark ended more than 4.5 percent lower.
  • Stocks in the U.S. jump higher at the open, but are still enduring the worst week since March.

European stocks closed flat on Friday afternoon, as global markets continued to recover from a days-long sell-off.

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The pan-European Stoxx 600 index closed down 0.14 percent, despite good gains for the basic resources and autos sectors.

By the closing bell, indices in London, Frankfurt and Paris had barely moved from their opening prices on Friday. The weekly losses for the Stoxx 600 ended at more than 4.5 percent lower.

Beaten-down basic resources stocks jumped around 1 percent on Friday.. Polymetal, Anglo American and Antofagasta were among gainers.

Looking at other individual stocks, Britain's Victrex slumped toward the bottom of the index after Morgan Stanley slashed its stock recommendation for the firm to "underweight" from "equal-weight." Shares of the London-listed stock were down almost 5 percent on the news.

Global growth concerns

Global markets had been shaken by two consecutive sessions of losses in the U.S., with Asian equities mixed Friday on the back of a 500-point drop for the Dow Jones Industrial Average at the close of Thursday's session. Traders have got increasingly nervous about the prospect of rising interest rates and a tightening Federal Reserve, alongside warnings from the International Monetary Fund (IMF) about risks to global economic growth.

U.S. bond markets have attracted much attention, with Treasury yields hitting multi-year highs this week — higher yields mean higher borrowing costs, seen as negative for corporates and their stock prices.

Meanwhile, President Donald Trump has continually criticized the Fed for raising rates too high too fast, on Thursday claiming the U.S. central bank had directly caused the stock market correction over the past couple of days.

Back in Europe, Italy and the U.K. remain in the spotlight in terms of political news. While excessive spending concerns continue to weigh on Italy's government, the pressure to strike a European Union withdrawal deal is a big challenge for Britain.

On Thursday, the European Central Bank was reported to be unable to intervene in the event of an Italian crisis situation unless the country first seeks a bailout from the EU. In Brexit affairs, British Prime Minister Theresa May on Thursday said that negotiations between the U.K. and the EU on a so-called Irish backstop — a key alternative to a hard Irish border — were likely to continue through to November.

In corporate news, Anglo-Dutch oil major Royal Dutch Shell is in talks to sell its stake in a Venezuelan joint venture with French firm Maurel & Prom, Reuters reported Thursday, citing three sources. Shares of the firm were slightly lower at the open Friday.

On the data front, German September inflation numbers showed a 2 percent rise for the month, boosted by energy and food prices.