European equities slip on United States’ economic troubles

European stocks fell yesterday despite takeover news in the energy sector as investors shunned risky assets after more weak US economic data dented confidence in the global recovery.

London’s FTSE 100 index of leading shares was down 0.31 per cent at 5,195.28 points as trading closed for the weekend.

In Paris, the CAC 40 fell 1.30 per cent to 3,526.12 points and in Frankfurt the DAX was down 1.15 per cent at 6,005.16. The Stoxx 50 index of leading eurozone companies was down 1.16 per cent at 2,643.98 points.

The market is “poised to close out the week on a sour note... extending yesterday’s steep descent that came courtesy of disappointing jobs and manufacturing data in the US, which dampened the outlook for the continued economic recovery,” analysts at Charles Schwab & Co said in a note.

In the United Sates, the Dow Jones Industrial Average was down 1.03 per cent at around 1645 GMT while the tech-rich Nasdaq composite index declined 0.65 per cent and the broader S&P 500 index shed 0.84 per cent.

Investors set aside news that state-owned Korea National Oil Corporation has launched a hostile takeover bid for Dana Petroleum, valuing the British oil explorer at £1.87 billion (2.3 billion).

Asian markets were sent reeling earlier yesterday as sentiment was rocked by sharp overnight Wall Street losses caused by the latest batch of disappointing data.

Tokyo fell 1.96 per cent, Sydney 1.07 per cent and Hong Kong 0.43 per cent.

On Thursday, US data stoked growing concerns about the recovery in the world’s biggest economy amid fears of a double-dip recession.

The Labour Department said the number of Americans filing new weekly claims for jobless benefits jumped unexpectedly to 500,000, the highest level in nine months and against forecasts for a small improvement.

Thursday’s jobless figures were the third straight week in which claims have risen, underscoring the threat posed by unemployment on the recovery from the worst US recession in decades.

US unemployment hit 9.5 per cent in July.

The glum figures were compounded after the Federal Reserve of Philadelphia said manufacturing activity in the mid-Atlantic region had dropped this month.

Elsewhere in Europe, Amsterdam fell 1.35 per cent, Brussels dropped 0.88 per cent, Madrid fell 1.40 per cent, Milan fell 1.22 per cent and Swiss stocks were down 1.52 per cent.