European stocks closed in the red on Friday due to ongoing tensions in the Middle East and uncertainties surrounding the Federal Reserve's interest rates. The uncertainty arose due to hawkish statements from Federal officials and data indicating stronger than projected growth in the United States non-farm payroll for March.
Investors also analyzed a horde of economic statistics emerging from Europe. Collectively, the pan European Stoxx 600 experienced a decrease of 0.84%. Losses were also reported by the U.K’s FTSE 100 (0.81%), Germany's DAX (1.24%) and France's CAC 40 (1.11%), while Switzerland's SMI went down by 1.67%.
Several other European markets, including Belgium, Greece, Netherlands, Portugal, Russia, Spain, and Sweden, reported significant to moderate losses. Losses reported by Austria and Finland were marginal. However, Denmark, Iceland, Ireland, Norway, and Turkiye witnessed an uptick. In contrast, Poland remained stagnant.
In the U.K, Ocado Group reported nearly a 9% loss, and other companies such as St. James's Place, JD Sports Fashion, National Grid, DCC, Scottish Mortgage, Kingfisher, Schrodders, and several others saw a 2 to 4.3% loss. However, companies like Flutter Entertainment, BAE Systems, Smith & Nephew, and a few others reported moderate gains.
In Germany, Zalando dropped over 5%, while Bayer dipped nearly 4%. Other significant losses were observed in Munich RE, Siemens Energy, Vonovia, and others. Firms in Paris like Eurofins Scientific dipped 4.75%, while moderate gains were reported by Teleperformance, Dassault Systemes, Capgemini, and others.
The U.S. Labor Department revealed that non-farm employment surged by 303,000 jobs in March, surpassing the expected growth of 200,000 jobs. Moreover, the unemployment rate dropped to 3.8% in March from February's 3.9%.
European economic data displayed a 0.5% decline in the Eurozone retail sales in February after flat performance in January, whereas a 0.4% decline was expected. Germany's import prices lowered by 4.9% year-over-year in February, albeit at a slower pace than January's 5.9% drop; a 4.6% decrease was anticipated.
Positive growth of 0.2% in February was reported in Germany's factory orders, showing a sharp contrast to January's 11.4% decline; however, it fell short of the expected 0.8% growth rate. German constructors maintained a pessimistic outlook amid high interest rates and economic uncertainty, resulting in a drop in the construction purchasing managers' index to 38.3 in March from February's 39.1.
In France, the industrial production for February was 0.2%, below the expected 0.5% growth. In contrast to a 1.5% fall in the previous month, manufacturing output advanced 0.9% in February. U.K. house prices, interestingly, declined by 1% in March, contradicting the anticipated 0.3% rise.
Finally, the U.K.'s construction activity indicated a refreshed expansion in March due to a surge in sales and new business inquiries. The Construction Purchasing Managers' Index for the U.K. improved to reach 50.2 in March from 49.7 in January, surpassing the projected growth to 49.8.
