EUROPIAN STOCKS SLIPS
The pan-European STOXX 600 index (.STOXX) slipped 0.6%, marking its worst fall in two weeks and Global equities also fallen after U.S. employment data released, which pointed towards slowing growth in the world's largest economy, with retail and travel stocks exposed to American markets suffering the most.
The FTSE 100 fell 0.4% to close at 7,138 at the end of a volatile session on Friday, after payroll data from the US showed the world's largest economy added fewer-than-expected 235 thousand jobs in August, adding to signs of a slowdown in recovery and pushing back Fed tapering expectations. Meanwhile, PMI data released in the morning showed the UK private sector economy expanded by the least in six months, while business activity growth rates in the Eurozone and the US also slowed. Also, concerns about the pace of global growth mounted after a report showed China's service sector contracted sharply in August. For the week, the FTSE 100 lost 0.1%.
Frankfurt’s DAX falling 0.4% to 15,781 and other major indices declining between 0.4% and 1.3%. Investors digested a batch of PMI surveys that suggested business activity growth rates in the Euro Area, UK and US slowed in August, while China's service sector sank deep into contraction territory. For the week, the DAX also lost 0.4%.
The CAC 40 closed 1.1% lower at 6,690 on Friday afternoon trades, in line with its European peers. Heavyweight French luxury stocks LVMH (-1.9%), Hermes (-1.3%), and Kering (-1.8%), weighed down on the main Paris stock index amid concerns about slowing growth in the key Chinese market. The French service PMI eased to 56.3 in August, a decimal point lower than flash estimates had predicted, as businesses said the government mandated health pass for customers had adverse effects on consumption. On the corporate side, EDF Renouvelables, a subsidiary of France’s utility giant EDF, announced a 15-year electricity supply contract for 300 megawatts of solar energy in the US. Meanwhile, glass manufacturer Saint-Gobain acquired a Dutch company specialised in designing flowmeters. On a weekly basis, the index finished 0.1% lower.
The FTSE MIB turned 0.6% lower and closed at 26,065 on Friday. Among Italian securities, oil stocks ENI, Saipem, and Tenaris traded in the red tracking losses in crude futures, while luxury stock Moncler fell to the bottom of the index, under pressure from slowing growth signs in the key Chinese market. Meanwhile, digital payments company Nexi also fell on news that the Italian antitrust watchdog opened an investigation into the acquisition of Italian competitor, Sia. On the data front, the Italian private sector expanded at the strongest pace since June 2006, according to the latest composite PMI reading, with services experiencing the steepest growth in 14 years. The index capped weekly gains at 0.1%.
The IBEX 35 finished 1.3% lower at 8,864 on Friday, with almost all sectors closing in the red. The country's business activity grew less than expected in August, slowing further from June's record high but remaining strong overall. For the week, the IBEX 35 lost 0.7%.
Despite this week fall, the euro zone business activity remained strong last month, IHS Markit's survey showed, suggesting the bloc's economy could be back to pre-COVID-19 levels by year-end despite fears about the Delta variant of the coronavirus and widespread supply chain issue. Meanwhile, The European Central Bank will meet next week amid calls from several hawkish members to slow down its pandemic-era purchases programme.
