European stocks fall as hot US payrolls flare rate worries
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window
Real estate, utilities lead losses
STOXX down 0.2%, though up on week
doValue gains after entering binding agreement to buy Gardant
Updated at 1550 GMT
By Shristi Achar A and Shashwat Chauhan
June 7 (Reuters) -European shares fell on Friday, led by rate-sensitive sectors like real estate and utilities after a stronger-than-anticipated U.S. jobs report fanned worries that the Federal Reserve would not cut interest rates anytime soon.
The continent-wide STOXX 600 .STOXX closed 0.2% lower, but recorded its first weekly gain in three weeks.
The U.S. economy created far more jobs than expected in May and annual wage growth re-accelerated, Labor Department data showed, underscoring the resilience of the labor market and reducing the likelihood the Fed will be able to start cutting rates in September.
"We believe the Fed does want to cut this year, but a cut is unlikely to happen until September at the earliest," said John Kerschner, head of U.S. securitised products & portfolio manager at Janus Henderson Investors.
"And when they do, it's likely they message this does not kick off a consistent hiking cycle of 25 bps per meeting, but perhaps a more infrequent cadence such as every other meeting."
Real estate .SX86P led sectoral losses with a near 3% drop, dragged down by a 7.2% fall in German real estate group Vonovia VNAn.DE on a Morgan Stanley rating downgrade.
Government bond yields, which move inversely to prices, rose across the continent following the U.S. data, with the yield on the benchmark 10-year Bund DE10YT=RR last at 2.622%.
Helping limit losses, heavyweight health care .SXDP stocks advanced 0.5% while technology .SX8P continued its strong run with a 0.4% gain.
A day earlier, the European Central Bank delivered a 25-basis-point rate cut, its first since 2019, joining central banks in Canada, Sweden and Switzerland in easing the monetary policy.
The ECB, however, provided few clues about the future interest rate path, leading traders to scale back bets on additional rate cuts.
Finnish ECB policymaker Olli Rehn said in a blog post that inflation will continue to decline and interest rate cuts will support economic recovery, while Bundesbank President Joachim Nagel said the ECB was not on autopilot mode and was still acting restrictively despite the cut.
Among individual stocks, Swiss banking software firm Temenos TEMN.S rose 5.1% after announcing a new share buyback programme of up to 200 million Swiss francs ($224.92 million).
Italy's biggest bad loan company doValue DOVA.MI gained 2.7% as it is set to acquire rival Gardant in a deal that includes 230 million euros ($250.59 million) in cash and the issuance of new shares.
Reporting by Shristi Achar A, Shashwat Chauhan and Purvi Agarwal in Bengaluru; Editing by Krishna Chandra Eluri, Kirsten Donovan
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
