European stocks slide on jitters over retail trading frenzy

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 26, 2021. REUTERS/Staff

(Reuters) – European stocks fell more than 1% on Friday, tracking declines in Asian and U.S. equity markets on caution around a retail trading frenzy that gripped Wall Street this week.

The benchmark STOXX 600 index dropped 1.6% in early trading, on course to end the week with its worst decline since late October.

London’s blue-chip FTSE 100 was down 1.7% and Germany’s DAX declined 1.6%, while on Wall Street, S&P 500 futures and Nasdaq 100 futures shed more than 1% each [MKTS/GLOB].

The U.S. stock market, already looking overvalued after a stimulus-led rally last year, has been jolted this week by steep gains in heavily shorted stocks, including Gamestop and AMC Entertainment.

Concerns around the potential economic damage from a new strain of the coronavirus in Europe also dented sentiment in the past few days.

In a busy day for earnings, Sweden’s Ericsson jumped 7.0% after reporting fourth-quarter core earnings ahead of market estimates on the back of strong sales of 5G equipment.

Swedish fashion retailer H&M slipped 1.3% after its profits plummeted in the full year through November and warned that the pandemic would hit it hard in the current quarter.

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