The European markets opened sharply lower on Friday and are plummeting amid a massive sell-off that began on Wall Street and have spread to Asia. Despite massive efforts from governments to help shore up the troubled credit markets and boost confidence, investors remain fearful the global economy is headed for a recession.
Also, oil prices are falling over fears of a global slowdown in demand. In European trading, crude for the November contract is plunging $4.34 to $82.25.
In early deals on Friday, the euro is advancing against its U.S. and British counterparts. As of now, the euro-dollar pair is worth 1.3604 and the euro-pound pair is trading at 0.8048. However, the 15-nation euro is showing volatility against the Japanese yen and the pair is currently worth 134.87.
In U.S. on Thursday, the major averages plunged in the final hour of trading, falling to their lowest closing levels in over five years. The Dow closed down 678.91 points or 7.3% at 8,579.19, the Nasdaq closed down 95.21 points or 5.5% at 1,645.12 and the S&P 500 closed down 75.02 points or 7.6% at 909.92.
Tracking Wall Street, the markets in Asia-pacific region have also closed sharply lower on Friday. Japan's Nikkei plunged 9.62%, China's Shanghai Composite index lost 3.57%, Australia's All Ordinaries indexes closed down 8.20%, South Korea's KOSPI fell 4.13% and Hong Kong's Hang Seng closed down 7.19%.
Among the European indices, the FTSEurofirst 300 index of leading European companies is losing 5.86% to 867.5 and the DJ Euro Stoxx 50 index is down 8.59% at 2,403.30.
Around Europe, the U.K's FTSE 100 index is plummeting 6.00% to 4,054.92, France's CAC 40 index is down 7.29% at 3,191.75 and Germany's DAX 30 index is slipping 8.25% to 4,483.92.
Financials are the worst affected. Schroders NV is plunging 18.63%, HBOS is sinking 15.50%, Deutsche Bank is receding 10.04% and Societe Generale is falling 9.04%.
Energy stocks are also down, pressured by falling crude prices. Tullow Oil is dropping 6.38%, Total is falling 5.76% and Royal Dutch Shell is declining 5.24%.
On the economic front, the statistical office INSEE said the French industrial production dropped 0.4% month-on-month in August, while economists were looking for a decline of 0.8. Manufacturing production dipped 0.5% month-on-month in August, after recording a 1.6% rise in July, revised up from 1.5%. The consensus forecast was for a 0.9% fall.
Meanwhile, traders in the U.S. will focus on the reports on trade balance for the month of August and import price index for the month of September.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.