Stock markets fell as disappointing US jobs data doused hopes that the global powerhouse would support the eurozone through the political uncertainty of this weekend's elections in France and Greece.
Traders were rattled when the US Labor Department said fewer jobs has been created than analysts expected and the labour market as a whole had shrunk. The figures combined with alarming economic data showing that the services sector in France, Italy and Spain contracted last month.
In London, almost £29bn was wiped off the value of the biggest companies when the FTSE 100 fell 1.9pc. French, German and American markets dropped, too, while oil lost $2.90 to $113.18 a barrel.
Marcus Bullus, trading director at MB Capital, said: "After a frankly horrendous week in the eurozone, the markets were looking to the US for some comfort. They didn't get it."
As concerns over the eurozone mount, Olli Rehn, the EU’s economic and financial affairs commissioner, is expected to call for more government spending on infrastructure projects to create jobs and boost growth. It would mark a key shift in the EU’s tough stance on deficit reduction, and could pave the way for an easing of austerity in countries such as Spain.
According to Markit, France's services activity plunged to a six-month low from 50.1 in March to 45.2 in April; in Italy it fell from 44.3 to 42.3; in Spain, employment in services - which accounts for 70pc of the country's economy - fell for the 50th month in a row, to 42.1.
But the real shock came when US non-farm payrolls were shown to have ticked up by 115,000 jobs in April, well below the 160,000 expected by economists.
Leaders urged discontented eurozone voters to consider the fragile debt crisis. German finance minister Wolfgang Schäuble said membership of the EU is a "voluntary decision". He warned that if Greece elects a government that doesn't respect its austerity commitments it will have to "bear the consequences".
No comments:
Write comments