European equities drifted on Friday, on track to end the week slightly lower, as analysts questioned the sustainability of a rally earlier in the month that had wiped out the regional benchmark’s losses from the start of Russia’s Ukraine invasion.
The Stoxx 600, which is trading close to its level of February 23, the day before President Vladimir Putin launched the offensive against Russia’s neighbour, fell 0.2 per cent. London’s FTSE 100 slipped 0.1 per cent and Germany’s Xetra Dax declined by a similar margin. Asian shares were mixed, with Chinese bourses falling while Japan’s Nikkei 225 closed out its ninth day of gains as exporters were boosted by the weak yen.
The inflationary effects of the Ukraine war, which has pushed the price of Brent crude oil up by more than a fifth since February 23, have combined with the US Federal Reserve signalling interest rate rises to make investors “very bearish”, Barclays equity strategists said in a note to clients.