European shares snap two-week long streak of gain as growth fears weigh

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European shares snap two-week long streak of gain as growth fears weigh

A basket of European stock indices snapped their two straight weeks of gains on Friday, as an unexpectedly strong US job data that appears to have bolted out of the blue, had stepped up investors’ bet over another 75bps (basis percentage points) rate-hike from the US Fed next month.

The regional pan-European STOXX 600 slumped as much as 0.8 per cent, as the index had extended its losses into the second day. In the matter of the fact, in the day’s steep losses in major European stock indices came forth as US nonfarm payrolls rose unexpectedly last month as beforementioned.

Surprisingly, data from US Labour Department had unveiled that US employers had added 528,000 jobs last month, nearly double of what analysts were predicting and marking off the largest gain since February. Nonetheless, adding that a sharp rise in nonfarm payrolls last month will prod US Fed to hike its benchmark lending rates by 75 bps (basis percentage point), eventually forcing the US economy down to the path of an inevitable recession in a near-term, a senior European economist at Capital Economics, Jack Allen-Reynolds, “The data published this week add to the evidence that a recession is just around the corner.

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”.

As US non-farm payrolls data had illustrated a recession might be lurking over the horizon of US economy, major European stock indices had been hit with a hefty whiplash as well.

European stocks fall as US recession risks loom large

Citing statistics, on Friday’s European market round-off, London’s blue-chip FTSE 100 lost 0.11 per cent to 7,439.74, French CAC 40 shrugged off 0.63 per cent to 6,472.35 and Frankfurt’s DAX dwindled 0.65 per cent 13,573.93.

Italy’s FTSE MIB faltered 0.26 per cent 22,586.88, while Madrid’s benchmark IBEX 35 added 0.08 per cent to 8,168.00. Over the week, London’s FTSE 100 added 0.22 per cent, French CAC 40 gained 0.37 per cent and Frankfurt’s DAX shrugged off 0.65 per cent to 13,573.93.

Italy’s FTSE MIB muzzled 0.26 per cent and Madrid’s IBEX 35 rose by 0.14 per cent.