By Christopher Whittall 

Stocks in Europe headed lower Thursday, partially reversing a rally in the previous session, as investors remained jittery following the recent volatility in global markets.

The Stoxx Europe 600 fell 0.7% in European morning trade, with a roughly 1% decline in oil prices adding to the negative tone. The pan-European index rose over 1% Wednesday to snap a five-day-losing streak.

S&P 500 futures fell 0.4% after the index rose 0.3% Wednesday. A rebound in technology and energy stocks had helped steady U.S. benchmark indexes following a sharp selloff that ripped through markets earlier in the week. U.S. markets are closed Thursday for the Thanksgiving holiday.

The recent lurch lower in oil prices has weighed on energy companies, adding to the market volatility that has been fueled by concerns about slowing global growth, trade tensions and heady valuations in the technology sector.

Oil prices resumed their downward slide Thursday with Brent crude, the international benchmark, down 1% at $62.86 a barrel, taking losses to over 21% from a month earlier. Analysts are concerned that the slide in oil prices is signaling weaker global growth, as well as reflecting the effects of oversupply.

Another source of volatility has been the shares of large tech firms that helped drive the S&P 500 up nearly 10% this year to its peak in mid-September. The benchmark index is now in negative territory for the year following the weekslong selloff, leading investors to question whether the nearly 10-year bull market is running out of steam.

"This is the ultimate question. Have we reached the end of the cycle and is the equity market anticipating that?" said Jeroen Blokland, a senior portfolio manager at Dutch asset manager Robeco.

Mr. Blokland believes that the economic cycle has further to run--highlighting the strength of the U.S. consumer in particular--and so thinks the selloff represents a buying opportunity for global stocks.

"Equities, especially outside the U.S., have room to go up," he added.

In Europe, mining stocks led the way lower with the Stoxx Europe 600 Basic Resources subindex slipping 1.5%. That takes losses in the sector to around 11% since the start of October.

Utility stocks were also under pressure, with Centrica PLC down over 8% after the owner of British Gas forecast lower-than-expected 2018 earnings.

The downbeat session in Europe underlines how investors remain skittish amid the heightened volatility. In Europe, concerns over political developments in the U.K. and Italy have weighed on local markets. More broadly, recent data showing that economic output in Japan and Germany contracted in the third quarter have reminded investors of the uncertain outlook.

"We are late cycle and that has implications for markets in a number of different areas. An increase in volatility is one of them," said Toby Gibb, a portfolio manager at Fidelity International.

"There are a number of things for people to worry about at the moment," added Mr. Gibb, citing Brexit, political risks in Italy, trade tensions and a potential slowdown in China.

Markets in the Asia-Pacific region were mixed. Australia's S&P ASX 200 rose 0.9% to snap a four-session losing streak. Japan's Nikkei Stock Average climbed 0.7% after two days of declines. Hong Kong's Hang Seng Index was up 0.2%. China's Shanghai Composite Index fell 0.2%.

In currency markets, the WSJ Dollar Index, which measures the buck against a basket of 16 others, was down 0.1%.

Write to Christopher Whittall at christopher.whittall@wsj.com

 

(END) Dow Jones Newswires

November 22, 2018 05:42 ET (10:42 GMT)

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