European stock markets slumped again and the euro hit a 23-month low versus the dollar yesterday on poor US jobs data in the wake of weak economic news from China and the eurozone, traders said.
Early losses deepened after the Labour Department said the US economy only added a meagre 69,000 jobs in May, pushing the unemployment rate up to 8.2 per cent.
London’s benchmark FTSE 100 index closed down 1.14 per cent at 5,260.19 points, while in Frankfurt the DAX 30 tumbled 3.42 per cent to 6,050.29 points and in Paris the CAC 40 dropped 2.21 per cent to 2,950.47 points.
The euro dived at one point to $1.2288, a low last seen on July 1, 2010, before recovering to $1.2389 dollars, up from $1.2361 late on Thursday.
Meanwhile, also on Thursday oil dived to fresh multi-month lows, driven by weak data in top global crude consumer the United States. In late afternoon trade, Brent North Sea crude for July slumped to $101.27 per barrel, which was the lowest level since October 5.
New York’s main contract, West Texas Intermediate crude for delivery in July, tumbled to $85.86 a barrel, which was last seen on October 24.
“Crude oil prices plunged on Thursday, tracking sharp losses in Wall Street, while a surprisingly large build in crude oil stocks showed serious concerns about the lack of the US oil demand,” said Sucden analyst Myrto Sokou.
Yesterday the closely watched US workforce figures were well below expectations of a 150,000 jobs increase and for the jobless rate to hold steady at 8.1 per cent.
The data showed that a nascent recovery in the job market had stalled. In the first quarter, the average number of new jobs was 226,000, while in April and May, the average fell to 73,000.
The jobs numbers sent US stocks tumbling, with the Dow Jones Industrial Average dropping 1.80 per cent to 12,170.45 points in midday trade.
The broad-based S&P 500 fell 1.95 per cent to 1,284.81 points, while the Nasdaq Composite dropped 2.19 per cent to 2,765.42.
The weak start to June came after a miserable May in which most markets gave up almost all the gains they had made since the turn of the year as the eurozone’s debt crisis came back into sharp focus.
Also yesterday, data showed that eurozone unemployment stood at a record high of 11 per cent, with Spain the hardest hit at 24.3 per cent in April.
More than 17.4 million people were jobless in the 17-nation single currency area in April, as 110,000 more men and women joined unemployment queues, according to Eurostat data agency.
The news comes as Greece’s political and economic future remains uncertain and Spain’s banking sector looked increasingly fragile, stoking fears that debt-laden Madrid could need an international bailout.
With investors still seeking refuge in safe-haven assets, the yield on 10-year German and French bonds hit fresh record lows yesterday.