ROME: European stocks stepped lower Friday after an unexpected pullback in German industrial output and a U.S. jobs report that roughly matched expectations, but the region’s benchmark still achieved a gain for the week.
The Stoxx Europe 600 SXXP, -0.91% fell 0.9% to close at 397.07. The pan-European index eked out a 0.2% gain on the week, its second-consecutive weekly rise.
Germany’s DAX 30 DAX, -0.81% lost 0.8% to 11,490.83 following a government report that industrial production, adjusted for inflation and seasonal swings, fell 1.4% in June from May. Economists polled by The Wall Street Journal expected a monthly gain of 0.4%. The slump in industrial output and exports indicate growth in Europe’s largest economy didn’t pick up much momentum in the second quarter.
“Such a weak outcome, together with disappointing retail sales data, attaches some downside risk to our Q2 GDP forecast,” said Apolline Menut, a European economist at Barclays, in a note. A reading of second-quarter German gross domestic product is due Aug. 14.
However, “robust June factory orders and July business surveys remain consistent with a solid performance from Germany’s industrial sector in the second half of this year, as external demand should strengthen after a disappointing [first half],” she wrote.
The DAX 30 scored a weekly rise of 1.6%, marking its first such rise in three weeks.
European stocks fell further in the wake of the much-anticipated U.S. jobs report. Economists said the July jobs report, while unspectacular, won’t stop the Federal Reserve from raising interest rates in September, and U.S. equities traded in the red after the employment data.
