Europe open: Markets pull back as energy stocks track oil lower

18th Sep 2026 08:28

(Sharecast News) - European stocks opened slightly lower on Friday as investors paused for breath following a busy week for financial markets, which included three major central bank decisions, with weakness in the energy and telecoms sectors providing a drag.

The Stoxx 600 was down 0.3% at 640.72, pulling back after two days of solid gains, with moderate losses recorded across all major indices.

Overnight, the Bank of Japan raised its key interest rate for the second time in three months, lifting it 25 basis points to 1.25%, its highest since 1995. The central bank also suggested that more hikes were on the way, with underlying inflation fast approaching its target.

The Bank of England on Thursday decided to stand pat on monetary policy, though the Federal Reserve on Wednesday evening hiked rates for the first time in three years.

Energy stocks were firmly in the red as the price of oil receded for the third straight session, with work underway to restore Saudi Arabia's East-West pipeline. The 1,201-kilometre-long pipeline was badly damaged by a strike last week, which raised concerns about extended disruptions to Saudi supplies. Brent crude was down 2.2% at $102.58 a barrel, after having come close to the $110 mark at the start of the week.

Major listed energy producers were all tracking the price of oil lower, including Repsol, Shell, BP, Eni and Equinor.

Telecoms stocks were also out of favour, including Deutsche Telekom, Airtel Africa, BT and Orange.

In contrast, chip stocks were continuing to recover after their recent sell-off tied to fears of a slowdown in the AI sector, with semiconductor manufacturers Infineon, Aixtron and ASML all performing well.

Meanwhile, Nestle was under pressure after Russia seized control of its assets in the country, where it was last reported to have six factories. "Nestle is committed to taking all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders, particularly its employees," the company said.

In economic news, German wholesale inflation surged to an annual rate of 4.6% in August, up from 3.0% in July and well ahead of the 4.1% consensus forecast, marking the highest rate since April 2023.

UK retail sales unexpectedly bounced back in August, helped along by the warm weather, according to figures released by the Office for National Statistics. Sales rose 0.5% on the month following a 0.5% decline in July, beating expectations for a 0.2% fall.