A third day of declines sent European stocks to a weekly drop after a US payrolls report did little to diminish prospects for a US Federal Reserve rate rise this year.
The STOXX Europe 600 Index fell 0.9 percent at the close, as all industry groups except miners declined.
US employers added 156,000 jobs last month, a US Department of Labor report showed.
While that missed the average economist forecast, it followed an increase in August that was more than previously estimated. Recent strong data have raised trader odds for another Fed hike, adding to worries about a tapering of European Central Bank stimulus.
The payrolls report “is not enough to change the prospect of a Fed hike — we also had a revision to the upside for the prior month,” said Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany.
His firm oversees US$260 million.
“There’s a limit to what central banks can do to help the economy and the markets need to start pricing in growth, and not the support.”
Traders’ bets for higher US borrowing costs in December have risen to 66 percent, up from almost even odds last week.
The probability of a hike next month fell to 17 percent, compared with 24 percent before the jobs release.
The STOXX 600 capped its fourth weekly decline in five, down 0.9 percent, after a rally from a June low ended early last month. Investors withdrew money from the region’s equity funds for a record 35th week, a report from Bank of America Merrill Lynch showed on Friday.
By contrast, a weekly gain of 0.6 percent in the FTSE 100 Index put it within 1 percent of its record close last year.
Miners including BHP Billiton Ltd and Anglo American PLC gained at least 2.2 percent after Bank of America recommended buying the shares, calling the sector “underowned.”
Exporters in the UK benchmark rallied this week as updates about Brexit sent the pound tumbling. The currency earlier on Friday plunged 6.1 percent in about two minutes, a move that traders said was exacerbated by computer-initiated sell orders, before paring the drop.
DELTA LLOYD UP
Among stocks active on corporate news, Delta Lloyd NV added 3.4 percent after rejecting NN Group NV’s unsolicited 2.4 billion euro (US$2.7 billion) cash offer.
Deutsche Bank AG’s US-listed shares rose 1.8 percent after the European market close after people familiar with the matter said Qatar’s royal family is considering raising its stake in the lender to as much as 25 percent.
E.ON SE rose 3.1 percent in Germany after a report that Cevian Capital AB is evaluating buying a 10 percent stake in the utility. Innogy SE, RWE AG’s “green” energy business, traded 0.3 percent above the issue price of its initial public offering. RWE slid 7.4 percent.
UK homebuilders fell after Halifax said house price growth weakened last month to its slowest pace in three years. Barratt Developments PLC and Bovis Homes Group PLC declined at least 4.5 percent.
Germany’s DAX was down 0.7 percent for the week while the CAC-40 in France fell 0.7 percent.
Additional reporting by AP
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