Europe ends in the red, as miners, US jobs data weigh; Dankse Bank sinks 6.24%

Big 5

Europe finished Friday’s session on a negative note as investors digested the latest jobs report out of the U.S., while monitoring moves in the bond markets.

The pan-European Stoxx 600 closed down 0.86 percent, with all sectors closing around the flatline or in the red. Technology and basic resources tanked more than 2 percent each as a sector. On the week, the Stoxx 600 tumbled 1.77 percent.

The FTSE 100 sank 1.35 percent, weighed down by the miners; while France’s CAC 40 slipped 0.95 percent and Germany’s DAX dropped 1.08 percent.

Europe’s basic resources stocks were the worst performers Friday, closing down 2.53 percent amid heightened global trade war fears. Vice President Mike Pence accused China of “malign” efforts to undermine President Donald Trump on Thursday, prompting Beijing to respond by saying his remarks were “unwarranted” and “slandered” the Asian giant.

Washington and Beijing’s political sparring marks the latest escalation in tensions between the world’s two largest economies, with investors increasingly concerned about an ongoing trade conflict. Basic resources stocks- with their heavy exposure to China- led the losses in Europe. Antofagasta, Anglo American and Rio Tinto all finished trade down 4 percent or more.

Looking at individual stocks, Denmark’s Danske Bank sank near to the bottom of the European benchmark on Friday, finishing down 6.24 percent, off its session lows. The move comes after Credit Suisse cut its rating to “neutral” from “outperform” and following recent news that it faces a U.S. criminal investigation into a 200 billion euro ($230.1 billion) money laundering scandal at its Estonian branch. Denmark’s biggest bank has lost a third of its value so far this year.

Sticking with weak European performers, Scout24 sank 5.7 percent, after HSBC slashed its target price and rating on the German-listed stock from “buy” to “hold”. Meanwhile, Britain’s Hammerson jumped towards the top of the index, up 2.8 percent after Credit Suisse upgraded its stock recommendation to “outperform” from “underperform.”

Elsewhere, shares of Unilever ended the session slightly under pressure after the consumer goods firm announced that its board had withdrawn its proposal to relocate to the Netherlands, following a growing wave of opposition from U.K. shareholders.

Bond yields

Prior to the Wall Street open, investors were reacting to the latest jobs report out of the U.S. In September, the U.S. economy created 134,000 jobs, below market expectations. Economists polled by Reuters were expecting to see the States add 185,000 last month.

U.S. stocks were sharply lower around the European market close, as investors digested the news that job creation for September had fallen to its lowest level in a year, while the unemployment rate sank to a level that hasn’t been seen in close to 50 years.

Market focus remains largely attuned to the recent moves in U.S. bond yields, which have climbed in recent days following robust economic data that exacerbated concerns about inflation and the risk of faster-than-expected interest rate hikes. The yield on the benchmark 10-year note surged to a more than seven-year high on Thursday.

Closer to home, Italy’s anti-establishment government has announced its new strategy to financial policy: a “brave and responsible” initiative, ending weeks of speculation about its spending plans. The FTSE MIB closed deep in the red on Friday.

Source: CNBC