European, Asian stocks decline after Wall Street slide ~ EconomyLens.com

London (AFP) – European and Asian stock markets retreated Friday after a slide on Wall Street, following weak US jobs data and signals that the Federal Reserve will not cut interest rates this year. Growing worries that valuations, particularly among tech companies, are far too high after this year’s blockbuster rally added to the sense of unease on trading floors.

Pressuring markets heading into the weekend pause was also weak Chinese exports data, the ongoing US government shutdown, and some poorly received earnings news, according to analysts. “Global stock indices are heading towards a weekly loss after pockets of volatility have knocked market sentiment,” noted Kathleen Brooks, research director at XTB trading group. “November is seasonally a strong month for stocks… The question now is, can seasonality outweigh valuation concerns and fears about the US economy to deliver more stock market gains this month?”

A rollercoaster week looked set to end on a negative note after a report by outplacement firm Challenger, Gray & Christmas showed US layoffs hit the highest level in 22 years last month. The report found that this year has been the worst for layoffs since 2020, when the labour market was decimated by the pandemic. The Nasdaq shed 1.9 percent and the S&P 500 more than one percent Thursday, with losses extending to Asia on Friday as Tokyo and Seoul closed down more than one percent. Losses among Europe’s main markets were about half a percent around midday.

Investors have been forced to use private data as a guide to the state of the world’s biggest economy owing to the longest-running US government shutdown that has closed numerous departments. While the latest jobs figures came a day after news that private hiring had increased, it sparked fresh concerns about the labour market and put pressure on the Fed to cut borrowing costs for a third successive meeting in December. However, comments from central bank officials suggested another reduction was not certain, echoing boss Jerome Powell’s warning last week.

Fed Cleveland chief Beth Hammack said she remained “concerned about high inflation”. And Chicago Fed boss Austan Goolsbee told CNBC he was concerned about making decisions during the shutdown without full data. Markets were pressured Friday also by official data showing China’s exports fell in October for the first time in eight months as trade tensions flared in the weeks before Chinese President Xi Jinping and US counterpart Donald Trump reached a detente.

London’s top-tier FTSE 100 index was dragged down by heavy losses to share prices of online property business Rightmove and British Airways owner IAG, which dropped 13 and eight percent respectively following earnings updates that undershot market expectations. On the upside, British broadcaster ITV surged 15 percent after announcing it was in preliminary talks to sell its television and streaming business to US-owned rival Sky for £1.6 billion ($2.1 billion).

– Key figures at around 1115 GMT –

London – FTSE 100: DOWN 0.6 percent at 9,681.94 points

Paris – CAC 40: DOWN 0.4 percent at 7,934.59

Frankfurt – DAX: DOWN 0.6 percent at 23,590.60

Tokyo – Nikkei 225: DOWN 1.2 percent at 50,276.37 (close)

Hong Kong – Hang Seng Index: DOWN 0.9 percent at 26,241.83 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,997.56 (close)

New York – Dow: DOWN 0.8 percent at 46,912.30 (close)

Euro/dollar: UP at $1.1549 from $1.1548 on Thursday

Pound/dollar: DOWN at $1.3108 from $1.3135

Dollar/yen: UP at 153.30 yen from 153.04 yen

Euro/pound: UP at 88.12 pence from 87.91 pence