European stocks continued their downward trend on Friday, extending losses from the previous session as investors grew increasingly wary amid concerns that the U.S. Federal Reserve may have delayed cutting interest rates for too long, potentially jeopardizing the world's largest economy.
In a sparse economic news day, France's industrial production saw a recovery in June, mainly driven by a rebound in transport equipment output, according to data from the statistical office INSEE. Industrial production grew by 0.8 percent in June, contrasting with a 2.2 percent decline in May; however, this was still short of the anticipated 1.0 percent growth. Manufacturing output mirrored this trend, rising by 0.8 percent and reversing a 2.7 percent fall in May. Market participants eagerly awaited the July jobs report, expected to provide further insights into the health of the U.S. economy.
The pan-European STOXX 600 index dropped 1.5 percent to 504.07 after a 1.2 percent decline on Thursday. The German DAX lost 1.3 percent, France's CAC 40 decreased by 0.7 percent, while the U.K.'s FTSE 100 was down 0.4 percent.
Tech sectors were hit hard, with selling pressures mounting after U.S. chipmaker Intel announced plans to cut more than 15 percent of its workforce in an aggressive cost-cutting measure. ASM International saw its shares plummet by 9.4 percent, BE Semiconductor fell by 7.5 percent, ASML declined by 6.5 percent, and Infineon Technologies dropped 3.4 percent.
On a brighter note, French insurer AXA surged 2.3 percent. Its subsidiary AXA Investment Managers is in talks to sell its investment division to BNP Paribas in a €5.1 billion deal. However, shares of BNP Paribas fell by 1 percent.
Energy company Engie jumped 3.3 percent after raising its profit outlook for 2024, attributing the upward revision to a robust first-half performance in power generation and lower-than-expected financial costs.
In contrast, British outsourcing firm Capita saw its shares drop nearly 3 percent following a decline in its first-half revenue. Wizz Air Holdings fell by 4 percent after reporting a decrease in both passenger numbers and seating capacity for July.
Meanwhile, IAG, the parent company of British Airways, climbed 6.3 percent on the back of strong first-half results and an announcement to resume dividend payments for the first time since the onset of the COVID-19 pandemic.
Pharmaceutical giant GSK rose by 2.3 percent, bolstered by the U.S. FDA approval of its Jemperli treatment in combination with chemotherapy.
