The European markets declined on Monday, after returning from a 4-day weekend for the Easter holiday. This was their first opportunity to react to the weaker than expected U.S. jobs report that was released on Good Friday. Bank stocks were under pressure Monday, as well as miners. The continued rise in yields of both Italian and Spanish government bonds also contributed to the weakness.
Friday's report showed that U.S. non-farm payroll employment increased by 120,000 jobs in March, following an upwardly revised increase of 240,000 jobs in February. Economists had expected the addition of about 201,000 jobs compared to the increase of 227,000 jobs that had been reported for the previous month.
Despite the weaker than expected job growth, the unemployment rate unexpectedly edged down to 8.2 percent in March from 8.3 percent in February.
China unexpectedly posted a trade surplus in March, as import growth slowed significantly despite government's efforts to shift towards domestic consumption-led economic growth. The latest figures from the General Administration of Customs showed Tuesday that trade balance was in a surplus of $5.35 billion in March compared to a $3.15 billion deficit expected by economists.
The Euro Stoxx 50 index of eurozone bluechip stocks dropped by 2.75 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, finished down by 2.09 percent.
The DAX of Germany declined by 2.49 percent and the CAC 40 of France closed lower by 3.08 percent. The FTSE 100 of the U.K. dropped by 2.24 percent and the SMI of Switzerland fell by 1.66 percent.
In Frankfurt, Merck declined by 2.06 percent. JPMorgan downgraded its rating on the stock to "Underweight" from "Neutral."
Commerzbank dropped by 5.43 percent and Deutsche Bank lost 3.75 percent.
Software AG fell by 5.76 percent, after JPMorgan reduced its price target on the stock.
Basf climbed by 1.87 percent, after Morgan Stanley raised its price target on the stock.
In Paris, STMicroelectronics dropped by 7.72 percent after the company lowered its gross margin outlook.
BNP Paribas finished lower by 5.72 percent, Societe Generale fell by 6.21 percent and Credit Agricole declined by 3.15 percent.
Air France-KLM fell by 4.03 percent, after the airline reported higher traffic and capacity for March.
In London, Vedanta Resources declined by 6.56 percent. The miner said iron ore sales in the fourth quarter declined from last year owing to a mining ban in a state in South India as well as transport problems.
Randgold Resources surged by 5.24 percent after the miner said its production forecast for 2012 remains unchanged, despite the unrest in Mali.
Rio Tinto dropped by 4.45 percent, Antofagasta fell by 4.87 percent and Kazakhmys lost 5.46 percent.
Barclays declined by 5.93 percent and Royal Bank of Scotland Group finished lower by 4.26 percent. HSBC Holdings fell by 3.16 percent and Lloyds Banking Group closed down by 5.04 percent.
Firstgroup fell by 7.20 percent, after Citigroup downgraded the stock to "Neutral" from "Buy."
Thomas Cook jumped by 13.41 percent, after the tour operator confirmed talks on revised financing arrangements.
Petrofac declined by 5.36 percent, after Liberum Capital downgraded its rating on the stock to "Hold" from "Buy."
Eurozone investor confidence deteriorated for the first time in four months in April, results of a survey by the think tank Sentix showed Tuesday. The confidence index came in at -14.7 in April compared to -8.2 in March and -11.1 in February. This was the first decline in the index since December 2011. Moreover the outcome was worse than economists had forecast. Expectations were for a modest decline in the index to -9.1.
France's gross domestic product remained flat in the first quarter, the Bank of France reiterated in a monthly survey report on Tuesday.
Germany's merchandise trade surplus increased more than economists expected in February, data released by the Federal Statistical Office showed Tuesday. The trade surplus increased to EUR14.7 billion in February from EUR11.9 billion a year earlier. Economists were looking for a trade surplus of EUR12 billion.
A leading index of the British economy increased for the second consecutive month in February, data from a survey by Conference Board showed Tuesday. The leading economic index increased to 102.6 in February from 101.6 in January.
U.S. wholesale inventories rose by more than expected in the month of February, according to figures released Tuesday by the Department of Commerce, with wholesale sales also showing a notable increase. Inventories for wholesalers came in at a seasonally adjusted level of $478.9 billion in February, reflecting a 0.9 percent increase from January levels. Most economists had expected a more modest 0.6 percent increase in inventories.
by RTT Staff Writer
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