Europe shares slide amid fears about Fed’s next move following US jobs data

European shares slid on Friday after stronger-than-expected US jobs data stoked market nervousness about more aggressive rates hikes by the Federal Reserve as central banks globally seek to rein in soaring inflation.

The pan-European Stoxx 600 index closed down 1.2 per cent, marking a third consecutive session of declines.

The much-awaited non-farm payrolls data showed US employers hired more workers than expected in September, while the unemployment rate dropped, fuelling bets of a fourth straight 0.75 of a percentage point rate hike from the Fed next month.

The US labour department report showed non-farm payrolls increased by 263,000 jobs last month after rising 315,000 in August.

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Dublin

The Iseq overall index dropped 2 per cent to 6,403.23, with building materials companies among the worst performers. CRH lost 2.4 per cent to €33.10, while Kingspan traded 3.7 per cent lower at €47.50.

Housebuilders were also out of sorts, with Cairn Homes down 3.4 per cent at 84c, while Glencairn Properties declined 3.9 per cent to 87c.

Banking stocks were mixed, with AIB rising 2.5 per cent, while Bank of Ireland dipped 0.6 per cent and Permanent TSB traded 1.9 per cent lower.

London

The FTSE 100 closed the day a fraction lower, by 0.1 per cent, with its losses limited by a stronger dollar against the pound. The UK benchmark index is dominated by internationally focused companies.

JD Wetherspoon climbed 12.4 per cent after the pub operator reported that its annual loss narrowed from a year ago, even as it battled soaring energy and labour costs.

Superdry jumped 10.9 per cent after the fashion group returned to profit in the year to April 30th, but said that it was cautious in the near term due to economic factors, including high inflation.

Oil majors BP and Shell rose 1.9 per cent and 1.4 per cent, respectively, as crude futures extended gains.

Energy stocks gained 5.6 per cent during the week following an Opec+ decision to make its largest supply cut since 2020 despite concerns about a possible recession and rising interest rates.

Europe

European chipmakers including Infineon and BE Semiconductor fell between 3 per cent and 7 per cent after South Korea’s Samsung Electronics and US chipmaker Advanced Micro Devices (AMD) signalled the chip slump could be much worse than expected.

Adidas lost 5.2 per cent after the German sporting goods maker put under review its business partnership with rapper and fashion designer Kanye West.

Renault jumped 4.9 per cent after ODDO BHF upgraded the French carmaker’s stock.

Credit Suisse rose 5.4 per cent after the lender said it would buy back up to 3 billion Swiss francs (€3.1 billion) of its bonds, making a show of strength as it seeks to reassure investors after a tumultuous week.

New York

US stocks were sharply lower in early afternoon trading as investors digested the US jobs statistics and AMD’s outlook.

Aggressive rises in borrowing costs have stoked fears of slowing economic growth and a hit to corporate profits, but with the labour market remaining tight, the US central bank was likely to continue with its monetary tightening plan.

“While the labour supply and demand remain in this state, combined with high inflation, the Fed will continue to be forced to tighten until the economy snaps off its current momentum,” said Rusty Vanneman, chief investment strategist at Orion adviser Solutions.

Sticking to the hawkish tone by most Fed officials, New York president John Williams said more rate hikes were needed to tackle sticky inflation.

AMD plunged as its third-quarter revenue estimates were about $1 billion less than previously forecast.

Peers Qualcomm, Intel, ON Semiconductors, Lam Research, and Nvidia shed also declined.

FedEx Corp lost ground after an internal memo accessed by Reuters showed the company’s division that handles most of the ecommerce deliveries plans to lower volume forecasts as its customers plan to ship fewer holiday packages.

— Additional reporting Reuters