The regional Stoxx 600 index was last down 2.48% at 3:17 p.m. London time. It fell below the 500 point mark for the first time since April, LSEG data showed. All major bourses and almost all sectors were in the red. Technology stocks dropped 6%, as U.S. giant Intel fell as much as 28% in morning trading after reporting a big earnings miss.
Global markets have been pulled lower by a flurry of central bank action — with the Bank of England cutting interest rates for the first time since 2020, the U.S. Federal Reserve holding rates and the Bank of Japan raising them this week — along with shaky corporate earnings and data releases.
The Stoxx 600 on Thursday suffered its worst session since the middle of June, weighed down by financials as French bank Societe Generale downgraded its outlook, and the BOE voted to reduce rates. Financial services were down another 4.94% Friday, as banks fell 4%.
The Thursday decision took the British central bank’s key interest rate from 5.25% to 5%, following a narrow 5-4 vote among policymakers. Markets had not been fully convinced that the BOE would take the step.
BOE Governor Andrew Bailey told CNBC that the direction for interest rates was “pretty clear,” but he would not comment on the extent or timing of further cuts and said services inflation and wage data would be watched closely. Market pricing suggests expectations for a rate hold in September, followed by another rate trim in November.
U.S. stock markets tumbled on Thursday, as jitters grew around the state of the economy. Weekly initial jobless claims came in higher than expected, while manufacturing data slowed.
U.S. job growth also slowed more than expected in July, the U.S. Bureau of Labor Statistics’ latest nonfarm payrolls report showed Friday. Stock futures fell following the release amid rising recessionary concerns.
Asia-Pacific markets logged steep losses Friday, with Japan’s benchmark indexes tanking as much as 5%.