European stocks slipped on Friday as US employment data pointed toward slowing growth in the world’s largest economy, with retail and travel stocks exposed to US markets suffering the most.
The pan-European STOXX 600 slipped 0.6 percent, marking its worst fall in two weeks after data showed that the US economy created the fewest jobs in seven month last month. The index fell 0.03 percent for the week.
Global equities also tumbled after the data.
Retail stocks were among the worst performers for the day, dropping 0.9 percent.
Bookseller WH Smith PLC, which makes at least one-quarter of its earnings from US customers, was the worst performer in the sector, down 3.4 percent.
Travel stocks sank 1 percent.
The laggard US data were attributed to a rise in the highly contagious Delta variant of SARS-CoV-2.
However, analysts saw a bright side in the reading, specifically that weakness in the job market would give less impetus to the US Federal Reserve to rein in liquidity measures.
“Friday’s weaker-than-expected jobs puts less pressure on the Fed to taper its stimulus, which is likely to provide a short-term boost for stocks. The stock market loves stimulus and any indication that the Fed will remain fully accommodative is good news for investors,” Zega Financial chief executive officer Jay Pestrichelli said.
European technology stocks were the best performers for the week, up nearly 2 percent as investors fled to sectors most resilient to disruptions caused by the COVID-19 pandemic.
A private survey also showed that activity in China’s services sector contracted sharply last month as restrictions to curb the Delta variant threatened to derail the recovery.
However, eurozone business activity remained strong last month, IHS Markit’s survey showed, suggesting the bloc’s economy could be back to pre-pandemic levels by the end of this year, despite fears about the Delta variant and widespread supply chain issues.
The European Central Bank is to meet next week amid calls from several hawkish members to slow down its pandemic-era purchases program.
A Reuters poll sees the bank announcing a cut to its asset purchases, given a recent spike in inflation.
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