London (AFP) - World stock markets mostly sank Thursday on intensifying recession fears, while oil prices receded before an OPEC output decision.
Frankfurt and Paris each tumbled 2.7 percent in early afternoon eurozone deals, and London shed 1.9 percent.
That followed a largely downbeat performance in Asia, although Shanghai rose after data showed a forecast-beating improvement in China's services sector on easing Covid restrictions.
Crude futures drifted lower as major oil producers led by Saudi Arabia and Russia were Thursday expected to keep to a decision on a limited boost to output despite the risk of high oil prices may help push the global economy into recession.
'Terrible mood'
Stock markets are "in a terrible mood across Europe", said AJ Bell investment director Russ Mould.
"There really is a lack of good news for investors to cling onto, and the near-term outlook looks bleak."
The threat of an extended period of elevated inflation and painful interest rate hikes has left traders fretting over the threat of a prolonged economic downturn, while the Ukraine war continues to sow uncertainty.
"Recession continues to be the primary concern at the moment...as countries continue to grapple with spiralling inflation and cost-of-living crises," said Mihir Kapadia, head of Sun Global Investments.
The surge in inflation to multi-decade highs has forced central banks to swiftly raise interest rates, dealing a hefty blow to equities as companies faces higher borrowing costs.
The Federal Reserve is next month expected to announce a successive 75-basis-point hike in US interest rates.
There had been hope that policymakers would ease off their hikes as economies show signs of slowing, but analysts say some officials are less concerned about a recession than letting prices run out of control.
Risk of 'going too far'
Fed boss Jerome Powell, speaking at a European Central Bank conference Wednesday, hinted again that such hikes could lead to economic contraction.
"Is there a risk that we would go too far?Certainly there's a risk," Powell said.
"The bigger mistake to make...would be to fail to restore price stability," he insisted.
ECB President Christine Lagarde stated this week that the guardian of the euro would go "as far as necessary" to fight inflation that was set to remain "undesirably high" for "some time to come".
Wall Street's Dow index closed up slightly Wednesday after plunging the previous session.
Key figures at around 1100 GMT
London - FTSE 100: DOWN 1.9 percent at 7,171.11 points
Frankfurt - DAX: DOWN 2.7 percent at 12,654.35
Paris - CAC 40: DOWN 2.7 percent at 5,867.61
EURO STOXX 50: DOWN 2.6 percent at 3,423.46
Tokyo - Nikkei 225: DOWN 1.5 percent at 26,393.04 (close)
Hong Kong - Hang Seng Index: DOWN 0.6 percent at 21,859.79 (close)
Shanghai - Composite: UP 1.1 percent at 3,398.62 (close)
New York - Dow: UP 0.3 percent at 31,029.31 (close)
Brent North Sea crude: DOWN 0.5 percent at $115.63 per barrel
West Texas Intermediate: DOWN 0.5 percent at $109.25 per barrel
Euro/dollar: DOWN at $1.0416 from $1.0442 Wednesday
Pound/dollar: UP at $1.2125 from $1.2124
Euro/pound: DOWN at 85.92 pence from 86.12 pence
Dollar/yen: DOWN at 136.38 yen from 136.59 yen
