European stock markets experienced a significant downturn, closing over 1% lower this Friday.
Stronger US employment data triggered the drop, hinting the Federal Reserve may maintain higher interest rates longer.
The slump in European indices contrasted with gains on Wall Street, ending a week of mixed performances across Europe after a buoyant March.
Notably, Ocado’s shares in London took a nearly 9% hit, furthering the decline after the announcement of the company’s president’s departure.
European indices experienced pressure: Frankfurt’s DAX down 1.30% to 18,163.94, London’s FTSE 100 dropped 0.81% to 7,911.16, Paris’s CAC-40 decreased by 1.11% to 8,061.31.
Expectations for the Fed to keep interest rates steady until June surged following the job report.
The US economy added a surprising 303,000 jobs in March, smashing analysts’ expectations.
This indicates robust economic activity that could complicate the Fed‘s inflation control efforts.
Meanwhile, European data showed a 0.5% month-on-month decline in retail sales for February, slightly worse than expected.
Germany’s modest 0.2% growth in factory orders also fell short of forecasts, underscoring the continent’s economic challenges.
Ocado’s notable decline influenced London’s market downturn, reflecting concerns over corporate leadership changes and their stock impact.
Milan’s FTSE Mib index and firms like Snam SpA and Italgas declined, but Ferrari saw a 1.27% gain.
Luxury sector stocks like Pernod Ricard and LVMH faced setbacks in Paris, revealing market sensitivity to economic indicators and monetary policy.
As European markets reel from the impact of potentially prolonged high US interest rates, investors are closely monitoring developments.
Lisbon’s PSI 20 and Madrid’s Ibex-35 also reported notable losses.
This reflects a cautious stance in the face of economic uncertainties, particularly concerning inflation and growth prospects.