Europe close: Markets sink on US jobs fears

Date: Thursday 31 May 2012

- US jobs data pushes down European markets
- Irish voters expected to endorse EU fiscal pact
- Telefonica decides on IPO for O2 Germany

FTSE-100: -0.29%
Dax-30: -0.96%
Stoxx 600: -0.53%
Cac-40: -0.86%
Ibex 35: -1.17%
FTSE MIB: 0.75%

All major European markets ended down on Thursday as bad news from the US on jobs dented already fragile confidence.

According to closely followed ADP Employer Services data, the US economy added 133,000 jobs in May, short of the market expectation of 150,000.

Data from the Labor Department worsened the mood, with the agency claiming first time jobless claims increased by 10,000 to 383,000 last week. Meanwhile, first-quarter US gross domestic product was revised lower from 2.2% to 1.9%.

In Ireland, voting is underway in a referendum on the EU’s so called “fiscal pact” which will set legal limits on countries’ borrowings. Opinion polls have indicated the Irish public will approve the pact.

The European Commission says it is considering giving Spain an extra year to comply with the terms of the fiscal pact, meaning it would not need to eliminate most of its budget deficit until 2014, instead of 2013.

COMPANIES

Ailing Spanish telecoms giant, Telefonica, has risen after its board approved an IPO for its O2 Germany subsidiary.

Overall, technology was the only sector on the Stoxx 600 to post a gain, up 0.14% by the close.

Construction and materials was the weakest sector, falling 2.22% with French giants Legrand and Vallourec amongst the biggest fallers.


OTHER MARKETS

By 16:58 in London the euro was down 0.05% against the dollar at $1.2361.

Futures contracts for front month delivery of Brent crude dropped 1.48% to $101.94 per barrel.

BS

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