European shares on Friday fell after a stronger-than-expected US jobs report ramped up bets of another 75-basis-point-rate hike by the US Federal Reserve next month, while fears of a darkening growth outlook pushed shares towards weekly losses.
The pan-European STOXX 600 was down 0.76 percent to 435.72, extending losses from earlier in the day after US nonfarm payrolls were shown to increase by 528,000 jobs last month, the largest gain since February.
The benchmark has lost 0.59 percent this week, snapping two weeks in positive territory, on worries over dour economic data from the region, rising geopolitical tensions and fears that higher interest rates could tip the economy into a recession.
“The data published this week add to the evidence that a recession is just around the corner,” Capital Economics senior Europe analyst Jack Allen-Reynolds said.
Figures this week also showed eurozone retail sales plunged in June and factory gate prices continued to rise, while eurozone business activity contracted last month for the first time since early last year.
“Forward-looking indicators suggest that worse is to come... If we are right, the European Central Bank will raise interest rates more aggressively than is currently priced into the market, and the economy will underperform consensus forecasts,” Allen-Reynolds said.
Britain’s FTSE 100 also closed lower, but a weakening pound helped the UK blue-chip index log its third consecutive week of gains.
The FTSE 100 dipped 0.11 percent to 7,439.74, with shares in WPP PLC, the world’s largest advertising group, falling 8.8 percent after its annual sales outlook failed to excite investors expecting stronger forecasts.
The midcaps index finished down 0.5 percent as the global mood soured after a solid US jobs report for last month bolstered the case for the Fed to press ahead with interest rate hikes.
Still, the FTSE 100 marked weekly gains of 0.22 percent, as sterling came under pressure after the Bank of England (BoE) on Thursday warned of a long UK recession even as it raised interest rates by the most in 27 years.
The index has several global companies that draw a large part of their revenue overseas, so a weakening sterling benefits the stocks.
The central bank raised its Bank Rate by a half percentage point to 1.75 percent — the highest level since late 2008 — in an attempt to control soaring inflation, but said Britain would enter a recession at the end of the year and not emerge until early 2024.
“Central banks generally tend to soft soap when it comes to bad news, however the frankness behind the BoE’s economic assessment was as dark as it could be,” CMC Markets UK chief market analyst Michael Hewson said.
Sweeping policy changes under US Secretary of Health and Human Services Robert F. Kennedy Jr are having a chilling effect on vaccine makers as anti-vaccine rhetoric has turned into concrete changes in inoculation schedules and recommendations, investors and executives said. The administration of US President Donald Trump has in the past year upended vaccine recommendations, with the country last month ending its longstanding guidance that all children receive inoculations against flu, hepatitis A and other diseases. The unprecedented changes have led to diminished vaccine usage, hurt the investment case for some biotechs, and created a drag that would likely dent revenues and
Global semiconductor stocks advanced yesterday, as comments by Nvidia Corp chief executive officer Jensen Huang (黃仁勳) at Davos, Switzerland, helped reinforce investor enthusiasm for artificial intelligence (AI). Samsung Electronics Co gained as much as 5 percent to an all-time high, helping drive South Korea’s benchmark KOSPI above 5,000 for the first time. That came after the Philadelphia Semiconductor Index rose more than 3 percent to a fresh record on Wednesday, with a boost from Nvidia. The gains came amid broad risk-on trade after US President Donald Trump withdrew his threat of tariffs on some European nations over backing for Greenland. Huang further
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