European equity markets fell on Friday in a broad-based retreat, led by heavyweight financial, pharmaceutical and energy and mining stocks.

Another strong session for oil prices drove the benchmark US crude contract past $126 a barrel. But energy stocks were among the losers as fears about the wider impact of record oil prices on the global economy weighed.

Spanish oil producer Repsol YPF fell 1 per cent to €26.35, while France’s Total slipped 0.8 per cent to €53.37 and Norway’s StatoilHydro lost 2.3 per cent to NKr193.80.

”With talk of $200 a barrel being in focus it is not surprising that we are seeing a knock on affect to the fuel pumps and the markets as a whole as investors start to feel the squeeze of high fuel prices,” said Claire Collingwood at CMC Markets.

By the close the FTSE Eurofirst 300 was down 1.3 per cent to 1,342.68, Frankfurt’s Xetra Dax shed 1 per cent to 7,003.17, the CAC 40 in Paris lost 1.9 per cent to 4,960.56 and London’s FTSE 100 slid 1.1 per cent to 6,204.7.

Sanofi-Aventis led the drugmakers lower after Schweizerhall, a Basel-based generic drugs company, revealed it was close to gaining approval for its version of the French company’s Plavix blood thinner. Sanofi shares fell 5.9 per cent to €47.50.

Among the winners, German power utility Eon rose 1 per cent to €126.96 after Australian investment group Macquarie said it was interested in buying the company’s power distrubution networks.