Stocks fall after ‘crazy’ US jobs data shocks market

European shares fell on Friday after much weaker US jobs data than expected. The US economy created the fewest number of jobs since September 2010 in May, reducing expectations of a interest rate increase this month.

Economists polled by Reuters had forecast a rise of 164,000 in US non-farm payrolls last month. They rose by only 38,000 jobs, a number described by one market analyst as “a really bad figure”, and another as “crazy” and “completely unbelievable”.

Economists now expect the Federal Reserve to wait until July before raising rates, meaning that any monetary policy decision in the world's biggest economy will be made after a UK vote on whether to leave the European Union takes place in three weeks' time.

DUBLIN

The Iseq closed down 0.5 per cent, as a 2 per cent drop for its biggest constituent, the building materials group CRH, proved a drag on the index. CRH finished at €26.32 on a day marked by unexpectedly poor US jobs data where it has a significant business.

Elsewhere, Ryanair finished flat at €4.14. Paper and packaging group Smurfit Kappa – recently promoted to the FTSE 250 Index – fell 1.3 per cent to €24.13, while Paddy Power Betfair rose 1.3 per cent to €120.70.

After only a 0.7 per cent fall in the previous session, Independent News & Media (INM) fell 8.5 per cent, closing at 14 cent. The media group published a trading statement on Thursday noting an accelerated decline in print advertising.

Drinks company C&C and insurance group FBD were among the climbers.

LONDON

The FTSE 100 index advanced, bucking the trend as commodity-related stocks rebounded. The index of blue-chip companies closed up 0.4 per cent, having climbed higher earlier in the session.

Precious metals miners were in demand as investors sought safe-haven assets with Fresnillo and Randgold Resources rallying 7.6 per cent and 6.8 per cent respectively.

Mining shares gained 3.8 per cent, the sector's biggest daily gain in a month and half, and energy shares were also up 1.2 per cent as oil and copper prices rose. Oil majors BP and Shell were up 1.5 per cent and 0.9 per cent respectively.

Mid-cap stock Indivior surged over 36 per cent after the pharmaceuticals company won a ruling to keep generic versions of Suboxane off the US market until 2024, according to a media report.

British supermarket stocks were the biggest fallers on the blue chip index, with Tesco, Sainsbury and Morrison all down between 3.8 per cent and 4.4 per cent respectively.

EUROPE

The FTSEurofirst 300 fell 0.9 per cent Friday and dropped 2.4 per cent over the course of the week after gaining for the previous three weeks running. The Dax in Germany and the Cac 40 in France both declined about 1 per cent.

Europe’s auto sector index fell 2.3 per cent, making it the worst-performing sector, as reduced expectations of an imminent US rate hike weakened the dollar and sent the euro rallying to a four-week high. A stronger euro is a disadvantage for the export-oriented sector.

Banks followed with a 2.2 percent drop. In the sector, Banco Popolare fell as 5.2 per cent to touch a record low after Italy's fourth-largest bank priced its €1 billion rights issue.

Airbus fell 3.5 per cent after Qatar Airways cancelled its first Airbus A320neo jet due to delays in deliveries.

US

Financial stocks led Wall Street lower in early afternoon trading in the wake of the shocking jobs data. The S&P financial index tumbled nearly 2 per cent and was on track for its biggest one-day loss in nearly two months.

Goldman Sachs, Wells Fargo, JPMorgan, Bank of America and Citigroup dropped between 2-4 per cent. The S&P financial index had dipped 0.3 per cent this year.

– (Additional reporting: Reuters)