European stocks fall as investors weigh central bank meetings and strong US jobs data

European stocks fell on Friday, with losses led by autos, as investors continued to weigh central bank policy decisions this week and a surprisingly strong set of U.S. jobs numbers.

The Stoxx Europe 600 SXXP index,
-1.33%
fell 1.3% to 462.26 and was on course for a 0.7% decline for the week. Shares fell 1.8% on Thursday, ending a three-day winning streak and marking the biggest decline since Jan. 24. The German DAX DAX,
-1.76%
fell by 1.7%, the French CAC 40 PX1,
-0.87%
fell 0.8% and the FTSE 100 UKX index,
-0.20%
was down 0.2%.

EURUSD euro,
-0.03%
rose 0.1%, while GBPUSD,
-0.55%
slipped 0.5% against the dollar. Bond yields continued to climb, with that of the 10-year German bund TMBMKDE-10Y,
0.201%
falling from 0.11% to 0.19%, and the yield of 10-year gilts TMBMKGB-10Y,
1.397%
went from 1.34% to 1.39%.

At Thursday’s meeting of the European Central Bank, President Christine Lagarde did not rule out the possibility of an interest rate hike in 2022, as she acknowledged that inflationary pressures in the eurozone are now ” tilted upward”. She said the central bank would assess inflationary pressures in detail and any response needed at the next meeting in March.

“Heavily indebted governments in the eurozone appear better placed to deal with tighter monetary policy than they were when the ECB last raised interest rates in 2011,” Jack said. Allen-Reynolds, senior Europe economist at Capital Economics, in a note. “That said, there is still plenty of room for even higher-than-expected inflation or a policy error that could cause further turbulence in bond markets.”

The Bank of England, meanwhile, made the first round of consecutive interest rate hikes since 2004, raising rates by 0.25% on a tight labor market and growing inflationary pressures. The central bank last rose in December.

New data showed that German manufacturing orders rose 2.8% in December and supply chain disruptions continue, a figure that beat expectations of a rise of just 0.3%, according to the forecasts of economists interviewed by the Wall Street Journal.

SPX US Stocks,
-0.21%
DJIA,
-0.26%

COMP,
-0.11%
The opening is mixed as strong jobs data raised expectations of a Federal Reserve hike in March. AmazonAMZN,
+9.17%
soared after blowout results and a few other names, including Snapchat’s parent Snap SNAP,
+42.08%
and Pinterest pins,
+3.59%.

The most successful stock in Europe was Assa Abloy ASSA.B,
+5.93%
with shares of the Swedish lock maker posted an increase in net profit in the fourth quarter and increased its dividend.

The Swedish company Assa Abloy AB published on Friday a rise in its net profit in the fourth quarter higher than the forecasts and increased its dividend. The lock maker said net profit for the period rose to 3.04 billion Swedish kronor ($334.2 million), from SEK 1.47 billion for the year-ago period.

“The company is not providing guidance, but we believe the strength of this performance in the face of continued supply chain and other cost pressures should be taken well,” said a team of analysts from Berenberg, led by Joel Spungin, in a note to clients.

Oxford Nanopore Technologies ONT,
+0.90%
was another big winner, up almost 5%. In a positive note on the maker of nanopore sequencing products, Berenberg analysts. They noted that the company’s shares have fallen this year due to concerns over new competition.

“However, although we believe that the Illumina ILMN,
-1.49%
the upcoming launch of long-read ‘synthetic’ technology should be closely watched, the strong reception of ONT at the recent Festival of Genomics 2022 conference in the UK and our own discussions with experts leave us wondering. comfortable with the significant competitive advantages ONT’s technology provides,” analysts Odysseas Manesiotis and Tom Jones said in a note to clients.

Shares of AddLife ALIF.B,
-21.37%
fell 18% after the Swedish life sciences company said CEO Kristina Willgård planned to step down this year.

Other decliners included automakers such as Stellantis STLA,
-4.93%,
down more than 3%, with Renault RNO,
-5.11%
and BMWBMW,
-4.28%
also among the losers.

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