European Stocks Dip on Tech Losses, US Jobs Caution

By Reuters
Reuters
Reuters
October 8, 2021 Updated: October 8, 2021

European stocks edged lower on Friday as declines in the technology sector more than offset gains in oil and auto shares, while investors remained cautious ahead of U.S. payrolls data.

The pan-European STOXX 600 index slipped 0.3 percent, with tech stocks falling about 1 percent as rising bond yields dimmed the high-growth sector’s appeal.

U.S. jobs data, set to be issued at 1230 GMT, is expected to show a surge in hiring in September as the effects of the latest COVID-19 surge began to subside.

While strong numbers could cement the case for the U.S. Federal Reserve’s withdrawal of its support for the economy, many analysts expect that even a second straight weak employment report would be unlikely to derail the central bank from announcing a slowdown of its bond purchases later this year.

“If we do move to head towards tightening monetary … the tech sector is likely to suffer the most from an interest rate hike because they have a relatively high portion of debt when compared with other sectors,” said David Madden, market analyst for Equiti Capital in London.

“There wasn’t a massive rush in Asia overnight so there isn’t a huge influence or reason to buy into European stock markets this morning.”

Still, the European stocks benchmark was on course for modest weekly gains as relief over a temporary lifting of the U.S. debt ceiling countered worries that soaring energy costs would push inflation higher.

Oil & gas stocks jumped 0.8 percent as crude prices rose on doubts the U.S. government would release oil from its strategic reserves.

UK travel stocks, including British-Airways owner IAG, Whitbread, and Ryanair, gained between 0.2 percent and 2.8 percent after Britain was set to scrap tough COVID-19 quarantine requirements for 47 destinations.

Czech trucking services firm Eurowag fell 9 percent in its London market debut after floating a day late and at a cut price.

Auto stocks rose 1.2 percent, rebounding from a selloff in September on concerns about supply chain bottlenecks and chip shortages hitting production.

German carmaker Daimler rose 2.5 percent as UBS upgraded its stock to “buy” from “neutral” and hiked its price target to 100 euros from 79 euros.

Cnova NV, the e-commerce arm of French retailer Casino, fell 5.5 percent after saying it could no longer confirm its June financial forecast due to challenging third-quarter business conditions.

By Sruthi Shankar

Reuters