European stocks off highs ahead of US jobs data

Reuters Sept 6 | Updated on September 06, 2019 Published on September 06, 2019

File Photo   -  Bloomberg

European markets pulled back marginally from one-month highs on Friday, as German data showed an unexpected fall in industrial output and the impact of upbeat signals on US-China trade talks faded ahead of US jobs data later in the day.

Norway's Telenor fell 5.3 per cent after it scrapped a plan to create a telecoms joint venture with Malaysia's Axiata Group, while news of a bid for Thyssenkrupp AG's elevator business helped prop up Germany's DAX.

With traders battening down the hatches ahead of the monthly payrolls numbers, bank-heavy Madrid .IBEX and Milan-listed .FTMIB stocks were marginally larger fallers, as the pan-regional banking index .SX7P dipped 0.2 per cent.

The benchmark European STOXX 600 index fell 0.1 per cent on the day, but was still on course to gain more than 1.5 per cent for the week, its third straight weekly rise.

“It’s going to be what looks like a pretty quiet session given we had a really good day in both Europe and the US yesterday on the back of (signs of) trade talks resuming,” said David Madden, market analyst at CMC markets, London.

Monthly US non-farm payrolls data are due at 1230 GMT, with analysts cautioning that any weakness could suggest a slowing US economy and knock stock markets.

Global indexes touched one-month highs on Thursday after Beijing and Washington agreed to hold trade talks in early-October, raising hopes that an economically damaging trade war could be brought to a halt.

That, and a handful of developments in Italian and UK politics this week, have brought some relief to the market, which took a battering in August on signs that Germany and other major economies were at risk of sliding into recession.

Germany's trade sensitive DAX .GDAXI was the out-performer on Friday with a 0.1 per cent rise, helped by a 1 per cent rise for Thyssenkrupp AG after Finland's Kone said it and a private equity partner would bid for the elevator business.

Also feeding into the market are expectations that the European Central Bank will cut interest rates when it meets next week, and point to possible further moves to head off a broader downturn.

Fresh data on Friday, however, showed an unexpected fall in German industrial output in July, adding to signs that manufacturers in Europe’s biggest economy are struggling.

Published on September 06, 2019
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