The lights of Frankfurt’s bank skyline shone in the final light.
Boris Roessler | Image Alliance | Getty Images
LONDON – European stocks extended losses on Friday amid a sluggish global economy, as weak U.S. economic data stoked fears of a recession.
regional Stoke 600 The index temporarily closed down 2.82%, its worst day since December 2022, according to LSEG data. London Stock Exchange data showed the index fell below the 500-point mark for the first time since April.
All major exchanges and nearly all sectors posted losses, with technology stocks closing down nearly 6%. American manufacturers Intel Early trading fell as much as 28% Reports sharp decline in profits.
Financial services fell another 5.22% on Friday, with bank stocks down 4.35%.
Policymakers decided on Thursday to cut the Bank of England’s key interest rate to 5% from 5.25% after a narrow 5-4 vote. Markets are not yet fully convinced that the Bank of England will take this step.
Bank of England Governor Andrew Bailey told CNBC that the direction of interest rates is “pretty clear” but he would not comment on the extent or timing of further rate cuts and said he would keep a close eye on services sector inflation and wage data. Market pricing indicates that interest rates are expected to remain unchanged in September, followed by another rate cut in November.
US stock market Stocks tumbled on Friday as worries about the state of the economy grew and fears of a recession intensified.
The latest data from the U.S. Bureau of Labor Statistics shows that U.S. job growth slowed more than expected in July nonfarm payrolls report Data on Friday showed the unemployment rate unexpectedly rose. The previous weekly jobless claims came in higher than expected and manufacturing data slowed on Thursday.
Asia Pacific market Stocks fell sharply on Friday, with Japan’s benchmark stock index falling as much as 5%.
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Cedric Chehab, BMI’s global head of country risk, told CNBC’s “Street Signs Asia” program that the U.S.-led sell-off started a week and a half ago but escalated in the middle of this week. This is due to factors such as a hawkish Bank of Japan disrupting the popular yen carry trade in the short term, weak U.S. data and earnings volatility.
“But one thing people don’t remember is that typically between July and October, there’s a seasonal uptick in stock market volatility, so this is not completely unexpected,” Chehab said.
“Especially after such a big rally in U.S. equities and global equities, earnings are a little bit mixed and valuations are high, but monetary policy is actually still very tight,” he added.
