(Reuters) – European stock index futures fell more than 1% on Friday, tracking declines in Asian and U.S. equity markets on caution around a retail trading frenzy that gripped Wall Street this week.

Futures tracking an index of Europe’s top 50 stocks were down 1.2% by 0647 GMT, setting up the benchmark STOXX 600 index to retreat further from near one-year highs hit last week.

London’s blue-chip index futures dropped 1.1% and Germany’s DAX futures declined 1.2%, while on Wall Street, S&P 500 futures fell 1% and Nasdaq 100 futures shed 1.1% [MKTS/GLOB].

U.S. stock markets, already looking overvalued after a stimulus-led rally last year, have been jolted by steep gains in heavily shorted stocks, including Gamestop and AMC Entertainment.

Concerns around the potential economic damage from a new strain of the coronavirus in Europe has also dented sentiment in the past few days.

(Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V)