LONDON – European shares closed lower on Friday, paring earlier gains after a weaker-than-expected US jobs report.
Pan-European Stoxx 600 closed down 1.15%, with all major exchanges and almost all sectors ending in the red. Technology and mining stocks suffered the biggest losses, 2.39% and 2.41% respectively. Health care stocks are a rare outlier, at just 0.02%.
The benchmark ended the week down 2.5%, marking its biggest weekly loss since the early August sell-off.
The decline weighed on Wall Street after an August jobs report showed payrolls rose 142,000, short of a forecast of 161,000 by analysts polled by Dow Jones. The unemployment rate met expectations to decrease to 4.2% from 4.3%.
US stocks fell in morning trade, with the S&P 500 down 1.63% and entering its worst week since April. The Nasdaq was also down 2.48%.
A slew of data from the US has come in weaker than expected this week, including the Manufacturing survey, job vacancies and private sector payrolls, fueling the bet that the Fed will cut by 50 instead of 25 basis points at the September 18 meeting. CME Group’s FedWatch tool finally put the probability of a 50-basis-point cut at nearly 50%, higher than before its latest release.
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In Europe, Volvo car Kab slid to its lowest level since January. The Swedish carmaker said on Thursday it would cut its mid-term and revenue targets, as well as aim to sell all electric and plug-in hybrid vehicles by 2023. Shares closed down 5.7%.
Investors are also monitoring news that the European Union’s Aviation Safety Agency has ordered an investigation Rolls-Royce The engine is produced in the Airbus A350-1000 aircraft, used by many airlines. It comes after a Cathay Pacific A350 flight from Hong Kong to Zurich was forced to land due to a fire in the fuel system, prompting a fleet inspection and the replacement of many engine parts.
Next week, UK employment and wage data and economic growth figures will be released, and the next monetary policy meeting for the European Central Bank will take place after the summer break.
The ECB is expected to resume its path of interest rate cuts after a pause in July.
