Weak US jobs figures spook global stock markets

Europen stocks slip as employment data points towards slowing growth in the US, the world's largest economy

European stocks slipped as US employment data pointed towards slowing growth in the world's largest economy, with retail and travel stocks exposed to American markets suffering the most.

The pan-European Stoxx-600 index slipped 0.6%, marking its worst fall in two weeks after data showed the US economy created the fewest jobs in seven months in August. Global equities also tumbled after the data.

Retail among the worst perfomers

Retail stocks were among the worst performers for the day, dropping 0.9%. Bookseller WH Smith, which makes at least a quarter of its earnings from US customers, was the worst performer in the sector, down 3.4%. Travel stocks sank 1%.

The laggard US data was attributed to a rise in the highly contagious Delta variant of the coronavirus. But analysts saw a bright side in the reading, specifically that weakness in the job market would give less impetus to the Federal Reserve to rein in liquidity measures.

Eurozone activity stayed strong

"Friday's weaker-than-expected jobs puts less pressure on the Fed to taper its stimulus, which is likely to provide a short-term boost for stocks,” said one analyst.

But Eurozone business activity remained strong last month, suggesting the bloc's economy could be back to pre-Covid levels by year-end despite fears about the Delta variant of the coronavirus and widespread supply chain issue.

Reuters