European stocks lower on jobs data

European stock markets gave up early gains yesterday as slowing economic activity pushed eurozone unemployment to a record 10.9 per cent and US jobs data added to the disappointment.

London’s FTSE 100 index fell 1.07 per cent to 5,750.29 points in afternoon deals, a day after finishing with strong gains on robust US manufacturing data.

In Paris, the CAC 40 was flat at 3,213.59 points and in Frankfurt the DAX 30 shed 1.03 per cent to 6,691.72.

Madrid’s IBEX 35 index plunged 3.12 per cent to 6,792.10 points as the banks, burdened through their exposure to the country’s collapsed property market, suffered heavy losses.

In foreign exchange deals, the euro fell to $1.3137 from $1.3234 in New York late on Tuesday.

“The holiday mood has soured very quickly in Spain,” noted IG Index trader Chris Beauchamp.

The eurozone unemployment rate hit a record 10.9 per cent in March while Spain, already struggling to fend off concerns that it will need a bailout, was at a staggering 24.1 per cent, according to Eurostat.

The German labour market continued to defy the eurozone debt crisis, even if seasonally-adjusted unemployment in­creased slightly in April.

However, the report coincided with a key eurozone manufacturing survey which extended its slump for a ninth month, stoking calls for the bloc’s leaders to take measures to stimulate growth rather than focus as now just on austerity.

The data “underpin the message of (Monday’s) Labour Day protests across European and throw the spotlight back on politicians who need to find the delicate balance between preserving momentum behind budget reform and policies aimed at supporting economic growth,” said Rabobank currency analyst Jane Foley.

In New York, US stocks opened lower after disappointing private-sector job growth added to concerns about the health of the US economy.

In the first five minutes of trade, the Dow Jones Industrial Average was down 0.43 per cent at 13,222.82. The Standard & Poor’s 500-stock index fell 0.63 per cent to 1,396.98 and the tech-rich Nasdaq dropped 0.59 per cent to 3,032.43.

“With earnings season winding down, and concerns about the European and US economic outlooks increasing, we feel that rising anxiety will create additional volatility in the stock market over the near term, with downside risks,” said Dick Green at Briefing.com.

Asian stock markets were firmer on Wednesday as investors followed stronger-than-expected manufacturing data from the United States and China.

Tokyo rose 0.31 per cent, Hong Kong gained 1.02 per cent higher, Shanghai climbed 1.76 per cent and Sydney edged up 0.14 per cent.