Europe’s main stock markets wavered on Friday, as dealers digested mixed data and paused after losses elsewhere that were rooted in global recession fears.
Frankfurt and Paris stocks slid as purchasing managers’ index (PMI) survey data showed eurozone business activity growth accelerated in April on the buoyant services sector — but manufacturing shrank.
London, however, edged higher as investors eyed rebounding UK business activity despite sliding retail sales.
“There was a consistent theme across today’s euro-area PMIs. Activity levels surged in the services sector due to a robust demand backdrop, while manufacturing activity continued to contract,” said Monex Europe analyst Simon Harvey.
The dollar rose against the euro after Federal Reserve officials pressed their case for further rate hikes to battle stubborn inflation.
Asian stock indices closed lower on fears of a prolonged downturn after data indicated the US economy was slowing down.
Wall Street tech firms took a hit Thursday from bets on further monetary tightening, while carmakers tumbled due to concerns about a possible price war.
Investors were also spooked by earnings reports from US regional banks that pointed to a weakening profit outlook following sector turmoil last month that saw three lenders collapse.
Figures showing recurring unemployment benefit claims hitting their highest level since November 2021, combined with an increase in new applications for jobless insurance, pointed to a softening labour market.
That came with news that the closely watched Philadelphia Fed Manufacturing Index fell more than expected and stood in contrast to a surprise surge in the New York Empire Fed Survey on Monday.
The readings indicated the world’s top economy was beginning to feel the weight of a year-long rate hike campaign by the Fed.
But while that suggests inflation could come down, there is a growing worry that recession could be coming.
– Fed expectations –
While traders are keeping close tabs on the release of corporate earnings, their attention is turning to next month’s Fed rate decision.
The broad expectation is for another 25-basis-point hike.
However, debate surrounds whether the Fed will lift again in June or decide to pause, particularly in light of last month’s banking scare, which was widely regarded as a result of monetary tightening.
On Thursday, Philadelphia Fed chief Patrick Harker said in prepared remarks that “some additional tightening may be needed to ensure policy is restrictive enough” to support the Fed’s dual mandate of keeping both unemployment and inflation low.
– Key figures around 1045 GMT –
London – FTSE 100: UP 0.1 percent at 7,906.91 points
Frankfurt – DAX: DOWN 0.4 percent at 15,730.79
Paris – CAC 40: DOWN 0.1 percent at 7,532.16
EURO STOXX 50: DOWN 0.2 percent at 4,374.85
Tokyo – Nikkei 225: DOWN 0.3 percent at 28,564.37 (close)
Hong Kong – Hang Seng Index: DOWN 1.6 percent at 20,075.73 (close)
Shanghai – Composite: DOWN 2.0 percent at 3,301.26 (close)
New York – Dow: DOWN 0.3 percent at 33,786.62 (close)
Euro/dollar: DOWN at $1.0964 from $1.0970 on Thursday
Pound/dollar: DOWN at $1.2385 from $1.2443
Dollar/yen: DOWN at 133.70 yen from 134.24 yen
Euro/pound: UP at 88.57 pence from 88.16 pence
West Texas Intermediate: DOWN 0.2 percent at $77.25 per barrel
Brent North Sea crude: DOWN 0.1 percent at $81.03 per barrel
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