European share declines limited after another Wall Street sell-off

European shares posted limited losses on Friday morning after a fresh sell-off on Wall Street, which has now entered a correction with the benchmark S&P 500 and Dow industrials falling more than 10 per cent from their January 26 record highs.

Europe's STOXX 600 share index fell 0.2 per cent by 0900 GMT with most European bourses trading flat or in negative territory. The index had already fallen 1.6 per cent on Thursday, with declines accelerating towards the end of the trading day. So far this year the pan-European benchmark is down over 4 per cent.

“It would appear that the brief respite for stocks seen in the middle of the week turned out to be the eye of the storm as once again rising bond yields prompted a further bout of selling across the board, not only in the U.S. last night but in Asia again this morning", said Michael Hewson, chief market analyst at CMC Markets.

Utilities stocks, which are expected to suffer as interest rates rise, were the worst performers and the sector's index fell 0.9 per cent.

Energy shares were also in negative territory as oil prices fell for a sixth day after Iran announced plans to boost production and US crude output hit record highs. The oil and gas index lost 0.5 per cent with Royal Dutch Shell and BP down both 1.1 per cent.

French asset manager Amundi posted the worst performance of the STOXX 600, losing 4.7 percent after publishing its annual results and new financial targets. A.P. Moller-Maersk missed fourth-quarter profit expectations and fell 4.3 per cent.

Belgium's Umicore was the top-gainer after raising 892 million euros in equity for new investments in rechargeable battery materials at a discount of only 2.7 per cent to Thursday's closing price. Technological sector was up 0.3 percent with Infineon rising 2.5 per cent and Siltronic adding 2.3 per cent.

Shares in French cosmetics group L'Oreal rose 1.8 per cent after its fourth-quarter sales beat expectations and comments by its CEO regarding its intentions on Nestle's stake further buoyed the stock.

In the banking sector, Italian investment bank Mediobanca rose 1.9 per cent after it raised its dividend guidance after second-quarter profit beat forecasts on higher net interest income and fees.

Still in Italy, UBI Banca added 0.9 per cent as it planned to sell a “substantial package” of bad loans over the next three years in an acceleration of efforts to clean up its balance sheet. The Italian bourse was one of the only in Europe to be trading in positive territory with a 0.3 per cent rise.