European shares were under pressure early Friday as a sharp
selloff in biotechnology and Internet companies on Wall Street
overnight triggered a retreat from global stock markets.
The benchmark Stoxx Europe 600 index and U.K. FTSE 100 index
were both down 0.8% early Friday, while Germany's DAX was down 1.1%
and France's CAC 40 notched up losses of almost 0.9%. This followed
on from losses in Asia, where Japan's Nikkei index ended 2.4%
lower, registering its sharpest percentage loss since March 14.
The poor start follows hefty losses in the U.S., where investors
unloaded shares of once-highflying biotechnology and Internet
companies on concerns that they are overvalued. The tech-heavy
Nasdaq Composite Index ended down 3.1%, suffering its worst daily
decline in 2 1/2 years.
The Dow Jones Industrial Average was also caught up in the
selling, ending down 1.62%, at 16170.22, its worst point and
percentage decline since February.
"Sharp moves on little news are always a little disconcerting:
the U.S. economic data was good and the Federal Reserve are still
on the dovish side," said Emma Lawson, at National Australia
Bank.
"The important guide is likely to be the earnings season, which
kicks off in full swing next week," added Ms. Lawson.
Still, Friday sees J.P. Morgan Chase & Co. and Wells Fargo
& Co., both report first-quarter earnings.
In other news, Fitch Ratings on Friday raised its outlook for
Portugal to "positive" from "negative," citing the bailed-out
euro-zone nation's strong economic recovery and falling budget
deficit.
The move had little market impact, with the yield on Portugal's
10-year benchmark bond barely changed at 3.86%.
In the currency market, the Australian dollar retreated from
five-month highs against the buck after China's inflation came in
just below expectations for March, suggesting domestic demand
remains soft as the economy loses momentum.
Also in China, premier Li Keqiang offered the strongest and most
public signal yet that the country is bracing for a new low in
growth. The comments that growth could be a bit higher or lower
than the 7.5% target add to investors' concerns about the world's
second largest economy after trade officials reported a surprise
drop in exports on Thursday.
In commodities markets, gold was down 0.3% at $1,316.70 an
ounce, and Brent crude oil was 0.1% lower at $107.47 a barrel.
Write to Clare Connaghan at clare.connaghan@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires