European stocks experienced a decline on Friday, driven by unexpectedly robust U.S. employment figures that heightened concerns about the Federal Reserve maintaining current interest rates for an extended period. Investor confidence was further dampened by rising Euro zone bond yields and potential U.S. tariff hikes.
According to the Labor Department, U.S. non-farm payroll employment surged by 256,000 in December, following a revised increase of 212,000 jobs in November. Economists had anticipated a 160,000 job increase, slightly down from the initially reported 227,000 jobs in the preceding month. The U.S. unemployment rate slightly decreased to 4.1% in December from 4.2% in November, defying expectations of it remaining stable.
The pan-European Stoxx 600 closed with a 0.84% decline. The U.K.'s FTSE 100 fell by 0.86%, Germany's DAX dropped 0.5%, and France's CAC 40 decreased by 0.79%. Switzerland's SMI ended with a 1.13% loss. Other European markets, including Belgium, Finland, Greece, Ireland, Netherlands, Portugal, Spain, Sweden, and Turkiye, also closed lower. In contrast, Austria, Denmark, Iceland, Norway, Poland, and Russia posted gains.
In the U.K. market, companies such as Schroders, Sainsbury, Diageo, Beazley, Croda International, BT Group, Marks & Spencer, Barclays Group, Prudential, Haleon, Hiscox, Natwest Group, and Tesco saw declines ranging from 2% to 4.5%. However, Intercontinental Hotels, Standard Chartered, IAG, Scottish Mortgage, Centrica, BP, and Reckitt Benckiser reported gains between 0.5% and 1.5%.
In the German market, Zalando closed more than 5% lower, while E.ON and Siemens Energy experienced losses of approximately 4.7% and 4.3%, respectively. Daimler Truck Holding, Munich, Vonovia, Allianz, Hannover Rueck, Brenntag, Siemens, Puma, BASF, and Porsche ended between 1% and 2.5% lower. Conversely, Mercedes-Benz surged nearly 4%, and Bayer gained approximately 1.5%. BMW, Volkswagen, Fresenius Medical Care, Siemens Healthineers, MTU Aero Engines, and Sartorius advanced by 0.6% to 1%.
In France, Pernod Ricard closed nearly 4% down, with Teleperformance, Schneider Electric, Veolia, L'Oreal, Saint-Gobain, Dassault Systemes, STMicroElectronics, Edenred, AXA, BNP Paribas, and Stellantis losing between 1% and 2.2%. ArcelorMittal climbed roughly 1.7%, and Publicis Groupe gained nearly 1%, while modest gains were recorded by Orange, Thales, and Airbus Group.
French industrial production rose by 0.2% in November compared to a 0.3% decline in October, defying economists' forecasts of a 0.1% decrease, according to INSEE's statistics. Manufacturing output similarly increased by 0.2%, partially offsetting the prior month's 0.1% drop. Another INSEE report highlighted a rebound in French consumer spending for November, driven by increased consumption of engineered goods and food. Household consumption unexpectedly advanced by 0.3% on a monthly basis, counterbalancing the revised 0.3% decrease seen in October. Economists had predicted a modest rise of 0.1%.
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