European stocks retreated on Friday as concern over a spike in U.S. coronavirus infections tempered the optimism arising from upbeat economic data out of the U.S., China and the euro zone.
The pan-European Stoxx 600 fell 0.6% by late morning, with banks dropping 1.9% to lead losses, while tech stocks bucked the trend to add 0.5%.
European markets are struggling to capture the overnight momentum from Asia Pacific, where stocks advanced after a survey showed that China’s services sector grew at its fastest pace in over a decade in June, according to Reuters.
This followed a broad rally late on Thursday after U.S. nonfarm payrolls grew by a record 4.8 million in June, outstripping expectations of a 3 million rise. The U.S. Labor Department also revealed Thursday that initial jobless claims rose by a greater-than-expected 1.427 million last week, however.
Market focus remains attuned to news of a resurgence in coronavirus cases stateside, with a Reuters tally showing that the U.S. reported more than 55,000 new cases on Thursday, a global daily record. Top White House infectious disease expert Dr. Anthony Fauci cautioned Thursday that the virus may have mutated to become more infectious.
Back in Europe, German car sales plunged 40% in June to a 30-year low, according to German newspaper Tagesspiegel. Meanwhile, British factories are increasingly expecting to lay off workers, a survey from sector group Make U.K. showed Friday, with 46% of manufacturers expecting to make redundancies within the next six months, rising from 25% in May.
Final IHS Markit services and composite PMI (purchasing managers’ index) readings Friday confirmed that the slump in business activity caused by the coronavirus pandemic eased in June as countries began to reopen their economies. The composite reading came in at 48.5 in June, a sharp rise from May’s 31.9 and close to the 50 mark, which separates expansion from contraction.
In terms of individual share price action, Rolls-Royce fell 5.6% after Fitch downgraded its corporate debt to “negative,” while Meggitt shares shed 5.1%.
At the other end of the European blue chip index, Germany’s Delivery Hero climbed 5.4% and Norwegian real estate company Samhällsbyggnadsbolaget (or SBB) added 4.3%.
