Investing.com - European stocks declined on Wednesday, tracking a sharp decline in oil prices which continued to weigh heavily on investor confidence.
During European morning trade, the EURO STOXX 50 slid 0.67%, France’s CAC 40 tumbled 0.95%, while Germany’s DAX 30 dropped 0.55%.
Oil was hit after the World Bank cut its forecasts for global growth on Tuesday, adding to fears over the faltering economic recovery. Oil prices continued to tumble on Wednesday after falling to almost six year lows in the previous session, after OPEC said it will not cut output despite a global supply glut.
The rout in oil, which has halved in value in six months, has fuelled concerns of exacerbating already low levels of inflation in many major world economies, including the euro zone.
Data last week showed that consumer prices in the euro area fell in December for the first time since October 2009.
Equity markets had strengthened earlier in the week amid speculation that the European Central Bank will embark on full blown quantitative easing as soon as its next meeting on January 22.
Financial stocks were broadly lower, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) plummeted 2.47% and 1.67%, while Germany's Deutsche Bank (XETRA:DBKGn) and Commerzbank (XETRA:CBKG) dropped 0.78% and 3.01%.
Among peripheral lenders, Italy's Unicredit and Intesa Sanpaolo tumbled 1.47% and 1.63% respectively, while Spanish banks BBVA and Banco Santander lost 1.35% and 3.60%.
Elsewhere, energy stocks added to losses with French oil and gas giant Total SA (PARIS:TOTF) down 2.29% and Italy's Eni tumbling 1.58%, while Norwegian company Statoil ASA (OSLO:STL) plunged 2.24%.
In London, commodity-heavy FTSE 100 plummeted 1.32%, weighed by sharp losses in the mining sector.
Shares in Rio Tinto and Bhp Billiton dove 5.26% and 5.86% respectively, while rivals Glencore Xstrata (LONDON:GLEN) and Antofagasta sank 8.73% and 9.84%.
Financial stocks were also broadly lower, as Lloyds Banking (LONDON:LLOY) and Barclays tumbled 1.20% and 1.21%, while HSBC Holdings (LONDON:HSBA) lost 1.40% and the Royal Bank of Scotland (LONDON:RBS) plummeted 1.90%.
On the upside, Astrazeneca (LONDON:AZN) climbed 0.94% after the company said that its anti-clotting drug Brilinta benefits patients more than a year after they’ve had a heart attack, extending the pill's revenue potential.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.42% decline, S&P 500 futures signaled a 0.49% drop, while the Nasdaq 100 futures indicated a 0.40% slide.
Later in the day, the U.S. was to produce data on retail sales, in addition to reports on import prices and business inventories.