European shares fell on Monday, tracking a sell-off in Wall Street after strong US jobs data fanned expectations that the Federal Reserve may raise interest rates sooner than previously thought.
Greek banking shares were among the biggest losers, with Bank of Piraeus down 4.9 per cent and National Bank of Greece 4.7 per cent lower ahead of a meeting of euro zone finance ministers to discuss reforms pledged by Athens.
The chair of the meeting, Jeroen Dijsselbloem, said the proposals, set out in a letter last week, were not enough to unlock further aid.
Also weighing on the sentiment, data showed German exports in January fell by the largest amount since August, dropping far more than expected and raising worries over the outlook for Europe’s biggest economy.
At 0913 GMT, the FTSEurofirst 300 index of top European shares was down 0.5 per cent at 1,562.73 points. The S&P 500 lost 1.4 per cent on Friday and posted a weekly loss for a second straight week.
“The US unemployment rate and the figure on job creations both beat the consensus, but that was blurred by the mixed picture on wage growth and labour force participation, which is very confusing for investors,’’ said Mirabaud Securities senior equity sales trader John Plassard in Geneva.
European stocks have been strongly outperforming Wall Street since the start of the year, supported by the European Central Bank’s quantitative easing.
ECB bond-buying programme
The ECB’s €60 billion a month programme of bond purchases with new money, aimed at boosting inflation and growth, starts on Monday.
Investors were also rattled by data from China showing a slide in imports, while the Bank of France cut its growth forecast for the French economy for the first quarter to 0.3 per cent from 0.4 per cent.
Shares in European property groups featured among the top losers, with Unibail down 2.4 per cent and Klepierre down 2.8 per cent, as traders cited a downbeat research note by JPMorgan. The bank downgraded its rating on the two stocks to ‘neutral’ from ‘overweight’, citing valuation levels.
Shares in French utility EDF fell 3.3 per cent on worries over the prospect of a tie-up with loss-making nuclear group Areva. French Energy Minister Segolene Royal said on Monday all options were on the table regarding a link-up between EDF and Areva, including an outright merger.
Swiss cement group Holcim rose 1.3 per cent and French peer Lafarge fell 1 per cent after Swiss weekly SonntagsZeitung reported Holcim’s largest stakeholder, Thomas Schmidheiny, wants a better deal for Holcim’s shareholders in the merger between the two groups.