European Stocks Close Notably Lower On Rate Hikes Jitters

European stocks closed notably lower on Friday after data from U.S. Labor Department showing a stronger than expected growth in U.S. non-farm payroll in the month of September raised concerns the Fed will continue with its aggressive interest rate hikes in the coming months.

Disappointing economic data from the euro area weighed as well on sentiment.

The pan European Stoxx 600 drifted down 1.18%. Germany's DAX tumbled 1.59%, France's CAC 40 shed 1.17% and the U.K.'s FTSE 100 edged down 0.09%, while Switzerland's SMI ended lower by about 0.8%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Ireland, Netherlands, Poland, Portugal, Russia, Spain, Sweden

Greece and Iceland posted modest losses, while Norway and Turkiye closed higher.

The U.S. Labor Department's data showed non-farm payroll employment jumped by 263,000 jobs in September after surging by an unrevised 315,000 jobs in August and spiking by an upwardly revised 537,000 jobs in July. Economists had expected employment to leap by 250,000 jobs.

The Labor Department also said the unemployment rate dipped to 3.5% in September from 3.7% in August, while economists expected the unemployment rate to come in unchanged.

In the UK market, Ocado Group dropped 5.78%. JD Sports Fashion, Kingfisher, Taylor Wimpey, Scottish Mortgage, Next, Ashtead Group, Persimmon, Unite Group, RS Group, Barratt Developments, Croda International and Frasers Group lost 3 to 4.2%.

Centrica rallied 3.65%. BAE Systems declined 3.47% and Imperial Brands gained about 2.4%. AstraZeneca, BP, IAG, GSK, Shell and British American Tobacco gained 1.4 to 2%.

Superdry jumped 11%. The British fashion brand has returned to profit after pandemic induced losses.

In Paris, Dassault Systemes tumbled more than 6% and STMicroElectronics drifted down 5.2%, while Legrand, CapGemini, Teleperformance, Schneider Electric, Saint Gobain, Vivendi, LVMH, Michelin, Hermes International, Veolia, Accor and Atos ended lower by 2 to 4%.

Renault climbed nearly 5%. WorldLine and Carrefour both gained about 2%. Sanofi, ArcelorMittal and Unibail Rodamco also closed notably higher.

In the German market, HelloFresh, Adidas, Puma, Sartorius, Zalando, Vonovia, Deutsche Post, Infineon Technologies, Fresenius, Deutsche Wohnen, Siemens, Daimler and HeidelbergCement lost 2 to 5.3%.

In Switzerland, Credit Suisse surged 5.2% after the embattled Swiss lender said it would buy back up to 3 billion Swiss francs ($3 billion) of senior debt securities.

In European economic news, survey data from the Lloyds Bank subsidiary Halifax showe UK house price inflation eased for the third straight month in September to the lowest in eight months.

The house price index climbed 9.9% year-over-year in September, slower than the 11.4% increase in the previous month, the data showed.

UK job placements expanded at the weakest pace in over a year-and-a-half in September as uncertainty over the economic outlook and candidate shortages hampered growth, the latest KPMG and REC, Report on Jobs survey, compiled by S&P Global showed.

Official data from Destatis showed Germany's industrial production declined more than expected in August as raw material shortages and supply chain bottlenecks continued to dampen the functioning of many industries.

Retail sales also weakened in August signaling weak contribution to growth from household spending amid rising energy prices.

Industrial output dropped 0.8% on a monthly basis in August after remaining flat in July. Production was forecast to ease 0.5%.

On a yearly basis, industrial production grew 2.1%, reversing a 0.8% drop in July.

France's foreign trade deficit increased in August from a year ago, as imports grew more rapidly than exports, data released by the customs office showed on Friday.

The trade deficit rose notably to EUR 15.30 billion in August from EUR 6.61 billion in the corresponding month last year. In July, the deficit was EUR 14.78 billion.

Switzerland's unemployment rate declined marginally in September, falling to 1.9% in the month, from 2% in August, the State Secretariat for Economic Affairs, or SECO, said on Friday. Economists had expected the rate to remain unchanged at 2%. In the same month last year, the jobless rate was 2.6%.

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