European benchmarks sank deeply into the red Friday morning as investors reacted to a string of corporate earnings disappointments and poor economic data.
French and German stocks led the decline after French consumer spending was shown contracting more than was expected in June and both markets bore the brunt of the morning's selloff.
The CAC 40 index fell 1.20% to 5,125 in Paris while the DAX slumped 1.4% during early trading in Frankfurt, to 12,131. In London the FTSE 100 was down 0.40% at 7,412 while, over in Southern Europe, the IBEX was down 0.62% in Madrid and the FTSE MIB was down 0.71% in Milan.
Renault (RNSDF was the top faller on the CAC 40 in Paris, with a loss of 6.5%, after sales in its core auto segment missed expectations. The carmaker saw revenues come in ahead of consensus for the second quarter however, this was mostly the result of a strong performance in the group's finance unit.
Essilor Internat (ESLOY , the glasses lens maker, was the second biggest faller on the CAC 40 with a loss of around 4% after its quarterly report left investors with a sour taste in the mouth. It reported sales growth of 8.2% although the bulk of this was driven by acquisitions, with organic growth slowing and the board reducing its guidance for full year like-for-like sales growth.
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Bayer stock continued its descent in the wake of Thursday's profit warning while Continental was hit by concerns over demand for new cars in Europe after a poor showing from Renault in the second quarter and after industry data showed car sales falling at 32 out of the region's 40 car makers during the second quarter.
In London, BT Group (BT shares led the FTSE 100 lower with a loss of 3.4% after the telecoms giant reported a sharper than expected fall in pretax profits for the first-quarter.
It took another one-off charge, of £225 million ($292 million) to settle warranty claims from two investors relating who were issued shares as part of the payment in BT's acquisition of mobile network EE. BT shares collapsed in value late last year after it unveiled a black hole in its books due to an accounting scandal at its Italian unit, prompting it to take a £530 million charge at the time.
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