European shares extend sell-off

London - European shares slid on Friday, with further declines in the price of oil hitting energy stocks, while political concerns over Greece also pegged back equities.

The pan-European FTSEurofirst 300 index fell 1.1% to 1 342.24 points, while the eurozone's blue-chip Euro STOXX 50 index also declined 1.1% to 3 123.04 points.

European stock markets had managed to stabilise slightly on Thursday, but a new fall in the price of oil meant the region's equity indexes resumed their losing streak.

The STOXX Europe 600 Oil & Gas Index fell 1.7% to touch its lowest level so far in 2014, as Brent crude dropped to a five-and-a-half-year low of $63 a barrel for a weekly loss of more than 8%, amid persistent concerns over a global supply glut and a bearish demand outlook.

Traders also remained concerned by Greece.

In Greece, Prime Minister Antonis Samaras on Thursday warned the country risked a "catastrophic" return to the depths of its debt crisis if his government fell, raising the stakes before a presidential vote this month.

"Greece is rearing its ugly head again. It's not good for the eurozone," said Darren Courtney-Cook, head of trading at Central Markets Investment Management.

The Athens ATG equity index was flat. The index had slumped 7.4% on Thursday and has fallen by roughly 20% this week.

Fear factor rises

Concerns about Greece and the lower oil price drove up the Euro STOXX 50 Volatility Index - the European equivalent of the US VIX volatility index that is often seen as a gauge of fears about the global economy.

The Euro STOXX 50 Volatility Index surged 12% to 23.27 points.

Greek Prime Minister Samaras is stepping up rhetoric against his archrival - the anti-bailout Syriza party - in a bid to win the backing of lawmakers in the presidential vote and avoid early elections.

Failure to elect a president triggers early elections, which opinion polls show Syriza is likely to win. Samaras this week brought the presidential vote forward by two months - leaving a final bailout review and plans for an exit from the programme up in the air while he seeks parliamentary backing.

"Syriza's war cries are clearly concerning. However, it is also possible for radical movements to become more realistic when in power.

Could Syriza agree to ongoing Troika oversight in return for a negotiation on publicly held Greek debt reduction? Were this to happen, we believe the market would be hugely relieved," said Rupert Welchman, European equities portfolio manager at Union Bancaire Privee.