European Markets End Lower As U.S. Rate Cut Hopes Fade

(RTTNews) - European markets ended lower on Friday, as stocks fell after data from the U.S. Labor Department that showed a stronger-than-expected jobs growth in the month of June dimmed prospects of an interest rate cut by the Federal Reserve this month.

Markets were also weighed down by lingering concerns about global slowdown, geopolitical tensions and growing uncertainty about the U.S. and China agreeing on a trade deal anytime soon.

The pan European Stoxx 600 ended down 0.72%. Among the major indices in Europe, the U.K.'s FTSE 100 declined 0.66%, while Germany's DAX and France's CAC 40 ended lower by 0.49% and 0.48%, respectively. Switzerland's SMI closed lower by 0.86%.

Austria, Belgium, Denmark, Finland, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Ukrain ended weak.

Czech Republic, Greece, Iceland and Turkey closed on the positive side.

In the UK market, miners Rio Tinto and BHP Group lost 3.8% and 2.7%, respectively.

Antofagasta, Experian, Micro Focus, Anglo American Foods, DCC, Persimmon and Halma lost 2 to 3%.

On the other hand, Just Eat and J Sainsbury moved up 2.8% and 2.4%, respectively. Tui, Vodafone Group, EasyJet, Tesco and Fresnillo also closed on a firm note.

In France, Schneider Electric declined by about 4%. ArcelorMittal, STMicroElectronics and Thales shed 2 to 2.5%, while Publicis Groupe, Carrefour, Societe Generale, BNP Paribas and Capgemini ended notably higher.

Siemens, HeidelbergCement, Covestro, Vonovia, E.ON and Thyssenkrupp were among the notable losers in the German market. Deutsche Bank ended nearly 2.5% up.

The U.S. Labor Department data said employment surged up by 224,000 jobs in June after edging up by a downwardly revised 72,000 jobs in May.

Economists had expected employment to increase by about 160,000 jobs compared to the addition of 75,000 jobs originally reported for the previous month.

However, the unemployment rate inched up to 3.7% in June from 3.6% in May. The unemployment rate had been expected to hold steady. Global markets had been gaining in strength in recent sessions amid growing expectations that the Federal Reserve would cut interest rates as early as this month, after key Fed officials sounded dovish and recent economic data too hinted at such a move.

However, today's jobs data has dampened hopes about a rate cut this month.

In economic news from Europe, Germany's factory orders decreased 2.2% month-on-month in May, in contrast to a 0.4% rise in April, a government report showed. Economists had forecast a marginal fall of 0.1%.

U.K. house prices declined for the first time in three months in June, figures from the Lloyds Bank subsidiary Halifax and IHS Markit showed.

House prices decreased 0.3% month-on-month in June, reversing a 0.4% rise in May. Prices were forecast to fall 0.4%.

A report from Statistics Sweden said Sweden's industrial production growth slowed in May, rising just 1.6% year-on-year, after a 3.7% surge in April.

Spain too saw its industrial production growth slowing to 1.4% in May, after it recorded a 1.8% growth a month earlier.

In trade news, talks between the U.S. and China will resume next week after U.S. President Donald Trump and Chinese President Xi Jinping agreed to trade war truce at the G20 summit.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to engage in talks with China's Vice Premier Liu He.