European stocks hit by record oil prices, insurance probe

LONDON (AFP) - European stock markets fell in early trading after sharp overnight falls on Wall Street on record high oil prices and a US government probe into the insurance sector.
The London FTSE 100 index shed 0.49 percent to 4,606.60 points on Friday, with the Frankfurt DAX 30 dropping 0.76 percent to 3,910.35 points and the Paris CAC 40 falling 0.62 percent to 3,642.33 points.
The DJ Euro Stoxx 50 index of leading eurozone shares declined 0.58 percent to 2,759.93 points.
The euro stood at 1.2392 dollars.
US stocks fell strongly Thursday as New York's crude oil futures surged to a new all-time high near 55 dollars a barrel, adding to concerns over the outlook for the US economy after disappointing data and mixed earnings reports.
Markets are worried that record-high oil prices will derail a global economic recovery, in part by weighing on companies' profits.
The Dow Jones Industrial Average skidded 1.08 percent to 9,894.45 and the Nasdaq composite sank 0.91 percent to 1,903.02.
The Standard and Poor's 500 index, the main broad-market indicator, retreated 0.93 percent to 1,103.29 points.
On the economic front, the US government said the country's trade deficit swelled to a near-record 54 billion dollars in August while new jobless claims rose by only 15,000.
US insurance stocks meanwhile fell sharply after New York state Attorney General Eliot Spitzer announced a new probe into what he called corrupt practices involving brokers and insurers.
That weighed on European peers Friday.
In London, insurer Royal and Sun Alliance shed 1.97 percent to 74.75 pence while British peers Prudential lost 1.43 percent to 464 pence and Aviva 1.44 percent to 547.5 pence.
French insurance giant Axa was the biggest faller in Paris, sinking 2.06 percent to 16.65 euros.
Spitzer on Thursday sued major US insurance brokerage firm Marsh and McLennan Co. for steering clients to insurers with whom it had lucrative payoff agreements.
The lawsuit, alleging that the firm solicited rigged bids for insurance contracts, also implicated the world's largest insurer AIG among other carriers. Dealers said European insurance firms could also face investigation.
In Asia, Tokyo's benchmark Nikkei-225 index closed 0.47 percent lower at 10,982.95 points Friday on concerns about record crude oil prices and the outlook for the Chinese economy following reports of sharply reduced demand for base metals, dealers said.
Hong Kong's key Hang Seng Index ended 0.18 percent higher at 13,059.43 points.