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(Sharecast News) - European shares slid into the red on Friday as investors on fears the US economy is slowing down with job losses on the rise and the valuations of AI companies.
The pan-regional Stoxx 600 fell 0.55% to 564 at 1158 GMT major bourses following suit. Germany's DAX was 0.71% lower, while the UK's FTSE declined by 0.62% and France's CAC 40 by 0.35%.
Concerns have been exacerbated by the ongoing government shutdown, which has stopped the release of reliable economic data, which was "making investors nervous", said IG chief market analyst Chris Beauchamp, who added that this was forcing the Federal Reserve to assess the economy with a fraction of the information it needed for policy decisions.
Beauchamp said the Fed and financial markets were now "groping around in the dark" after the suspension of inflation and employment data.
XTB research director Kathleen Brooks said: "Global stock indices are heading towards a weekly loss after pockets of volatility have knocked market sentiment. The S&P 500 is lower by 1.5% in the last 5 trading sessions, and if this persists then the US blue chip index could experience its first weekly loss in a month."
"Fears about high AI stock valuations knocked market sentiment once more on Thursday, however, futures prices suggest that the sell off may not gain traction on Friday, and, so far, the S&P 500 is expected to open higher along with the Eurostoxx 50 index, although futures markets are still pointing to a mildly weaker open for the Nasdaq."
In economic news, Germany's trade surplus fell more than expected in September on the back of a sharp rise in imports to the highest level in two and a half years, according to data out on Friday from Destatis.
The calendar and seasonally adjusted trade balance declined to 15.3bn from a revised 16.9bn in August, and below the 18.0bn recorded in September 2024, the Federal Statistics Office reported.
This was well below the consensus forecast of 16.8bn and the smallest surplus since October 2024.
Among equities movers, ITV shares surged by a fifth after the company conformed it was in talks with Sky to sell its broadcasting arm for 1.6bn.
Rightmove tanked as the property website warned profit growth would slow as it pumped more cash into AI.
IAG shares fell after the airline group after weak US demand hit earnings.
Reporting by Frank Prenesti for Sharecast.com