Unemployment news stokes slide in euro shares

European stocks slide more than 4 per cent with oil and bank stocks leading the decline.

LONDON // European stocks slid more than 4 per cent on Friday as investors on both sides of the Atlantic reeled at grim US unemployment data, and with oils and bank stocks leading the decline. The pan-European FTSEurofirst 300. FTEU3 index closed down 4.2 per cent at 792.3 points. Among Europe's banks, Credit Suisse, BNP Paribas, UniCredit and Royal Bank of Scotland closed between 5.5 per cent and 7.2 per cent lower.
"Markets received a jolt of pain as US employment numbers came in," said David Evans, a market analyst at BetOnMarkets.com. "Today's figures were the worst for three decades and are yet another instance to add to the ever growing pile of 'once in a generation' type extremes that we've seen in 2008." Energy stocks languished as crude slid towards US$41 a barrel. BG Group, BP, Royal Dutch Shell, Tullow Oil and Total slipped between 6.7 per cent and 8.8 per cent.
Across Europe, the FTSE 100 index ended down 3.3 per cent, Germany's DAX lost 4 per cent and France's CAC fell 5.5 per cent. In London, the FTSE 100 closed 114.24 points lower at 4,049.37. The index was down 5.6 per cent last week and 37.3 per cent this year. Heavyweight energy shares weighed most on the index, as crude prices slid to below $42 a barrel, their lowest level since January 2005, after data showing the US economy shed more than half a million jobs in November.
BP fell 6.6 per cent, BG Group lost 7.4 per cent, while Royal Dutch Shell shed 6 per cent and Tullow Oil dropped 10.3 per cent. "Clearly, the shocking deterioration in the [US] labour market is a blow to the economy in general, and the housing market in particular... Above and beyond that the news will intensify the vicious circle as it will have a feedback effect on sentiment," Mark Cliffe, the chief economist at ING Barings, said.
The weak US data intensified speculation that the Bank of England may ease monetary policy further, having cut interest rates by a full percentage point to 2 per cent last week. "This is obviously going to increase the sense of urgency among policymakers in trying to shore up the badly affected sectors of the economy," Mr Cliffe said. * Reuters