LONDON: Europe's major stock market indices were swept lower on Thursday by a pronounced slide in oil prices this week.
Oil has been in the doldrums on stubborn concerns over a vast supply glut, casting a dark shadow over the energy sector.
"The rout in oil prices continues, and the worries this creates are spilling over into equity markets as well, which are looking decidedly unhealthy once again," said Chris Beauchamp, chief market analyst at trading firm IG.
The London stock market was down 0.5 percent around midday, while Frankfurt fell 0.3 percent and Paris lost 0.6 percent compared with the close Wednesday.
While oil prices rose Thursday on news of falling US inventories, this followed heavy declines caused by the market remaining awash with crude.
"European equities have fallen again as the weakness in oil is weighing on investor confidence," noted CMC Markets analyst David Madden.
"Oil has fallen back ... and traders are worried it could bring about low inflation and diminished growth."
Low inflation can ultimately lead to deflation, or a prolonged period of falling prices, causing consumers to hold off purchases in the hope that the cost of goods will drop even further.
New York crude had dived Wednesday to ten-month lows, hitting $42.05 a barrel.
London Brent oil meanwhile hit $44.35, a trough last seen in November.
"Overall, the market remains fixated on what happens with oil," added Beauchamp.
In Asia on Thursday, shares in Japanese airbag maker Takata suffered another crushing collapse, plummeting more than 50 percent on fears the company at the centre of the auto industry's biggest-ever safety recall is headed for bankruptcy.
The Tokyo-based car parts giant, facing lawsuits and huge recall-related costs over a bag defect linked to at least 16 deaths globally, has suffered a share-price plunge for four straight days.
It is now worth less than a quarter of its value from just a week ago when a report by Japan's leading Nikkei business daily said it would seek bankruptcy protection and sell its assets to a US company.
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