(Bloomberg) -- European stocks dropped as worries over the risk of a US recession and slowing growth in China weighed on sentiment ahead of a closely watched jobs report later this week.
The Stoxx Europe 600 Index ended the session 0.5% lower, extending declines as figures showed US companies added the fewest jobs last month since the start of 2021. The Labor Department’s monthly payrolls report is due Friday.
Consumer products, health care and chemicals stocks were among the biggest decliners. France’s CAC 40 Index fell 0.9% after President Emmanuel Macron named former Brexit negotiator Michel Barnier as prime minister.
European equities have gotten off to a shaky start in September as renewed jitters over the health of the US economy once again roiled risky assets, with high-flying technology stocks among the hardest hit. The move comes just after the Stoxx 600 Index reached a record.
“The market is pricing to reflect a little bit of uncertainty and a certain amount of fragility, and that is relatively normal,” said Helen Jewell, chief investment officer of BlackRock Fundamental Equities, EMEA. “Previously, what the market was pricing for was perfection and now the market is pricing for the normal circumstance of a range of outcomes.”
The US payrolls report on Friday will be assessed for clues over the size of the Federal Reserve’s first interest-rate reduction.
Among individual movers Thursday, luxury stocks were a weak spot amid renewed worries over Chinese demand, following a Bloomberg report that LVMH’s Tiffany & Co. was planning to downsize its flagship store in Shanghai. Associated British Foods Plc shares fell as the Primark-owner warned it will make less profit than expected from its sugar business after international prices dropped.
The pan-European benchmark is up around 7% so far this year, boosted by gains across the more defensive health care and telecom sectors, though banks have also had a strong showing. Still, the Stoxx 600 has underperformed its US counterpart following political turmoil in France.
For more on equity markets:
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- M&A Watch Europe: Grifols, BPM, Spectris, Attica Bank, DSV
- One of Year’s Best European IPOs Faces Earnings Test: ECM Watch
- US Stock Futures Unchanged; Yext Inc. Gains
- All REIT For Some: The London Rush
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--With assistance from Sagarika Jaisinghani.
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