Global stock markets were shaken after data showed the US unemployment rate jumped to a three-year high amid a sharp slowdown in hiring and fears of a recession in the world’s largest economy.
The European Stoxx 600 index fell about 3% on Friday as global stock markets were shaken by the US jobs report.
The index fell 2.7% to 497.85 points, recording its lowest level in more than 3 months.
Most European sub-indices declined, with the technology sector plunging 6.1%, its biggest daily decline since October 2020.
The financial sector lost 5.2%, while banking stocks fell 4.3%, extending their decline from the previous session.
Data showed that the unemployment rate in the United States jumped to a three-year high of 4.3% last July amid a significant slowdown in hiring, which increased fears of a deteriorating labor market and the possibility of the economy being exposed to recession.
Nonfarm payrolls increased by 114,000 jobs last month, after rising by 179,000 jobs in June after being revised downward, the U.S. Labor Department’s Bureau of Labor Statistics said in its employment report on Friday.
Economists polled by Reuters had forecast payrolls rising by 175,000 jobs after a gain of 206,000 jobs in June.
Estimates ranged from 70,000 to 225,000 jobs.
US stocks fall
In the United States, US stock indexes fell sharply at the opening today, Friday, after weak jobs data.
Shares of Amazon.com Inc. and Intel Corp. saw big declines on disappointing forecasts.
The Dow Jones Industrial Average fell 0.68% to 40,075.33 points at the open.
The Standard & Poor’s 500 Index lost about 1.3% to 5,376.63 points, and the Nasdaq Composite Index fell 2.41% to 16,780,446 points.
U.S. stocks also fell sharply yesterday after data raised concerns that the economy was slowing faster than expected while the Federal Reserve kept monetary policy tight.
Japanese stocks plunge
In Japan, the Nikkei index fell about 6% on Friday, recording its worst session in more than four years, as investors avoided risky assets amid fears of a slowdown in the US economy and uncertainty about the path the Japanese central bank will take regarding monetary policy.
The Nikkei index closed down 5.81% at 35,909.7 points, its lowest closing level since January 26 and the biggest daily decline since March 2020.
The broader Topix index fell 6.14 percent to 2,537.6 points, its biggest daily decline since mid-2016.
“The momentum in the U.S. market turned negative last night as recession fears mounted. That put a lot of pressure on Japanese stocks today,” said Yugo Tsuboi, senior analyst at Daiwa Securities.
All 33 sector sub-indexes on the Tokyo Stock Exchange declined, with the financial sector leading the losses.
The brokerage and banking sectors fell by 12% and 11%, respectively.
The Bank of Japan this week raised interest rates to 0.25% and Governor Kazuo Ueda has not ruled out another hike this year, prompting expectations of a rate hike to 0.5% by the end of the year and 0.75% in April.
UAE stock exchanges lose
UAE stock markets closed lower on Friday, tracking global equities as investor sentiment was dampened by tensions in the Middle East and concerns about a slowing US economy.
Oil prices are set to fall for a fourth straight week as signs that disappointing global fuel demand has outweighed concerns about supply disruptions from the Middle East.
The UAE bourses suffered heavy losses today as investors became more cautious amid rising geopolitical tensions in the region, risk aversion in major global stock markets and volatile oil prices, said Joseph Dahrieh, managing director at TechMill.
Dubai’s index fell 1% amid widespread selling, including real estate and financial stocks.
Emaar Properties and Emirates NBD shares fell 2.4% each.
The Abu Dhabi index also fell 0.8%, with First Abu Dhabi Bank shares falling 1.5%.
