European shares accelerated losses to close at a six-week low on Wednesday, as investors fretted that U.S. data could herald a scale-back in the Federal Reserve's asset purchase program.
The pan-european FTSEurofirst 300 Index closed provisionally 1.4 percent lower at 1,193.96 points, having mimicked the downward trend in U.S. stocks after mixed U.S. data.
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The U.S. private sector created just 135,000 jobs in May, according to the ADP National Employment Report, less than estimates for 165,000. The ADP figures come two days ahead of the government's more comprehensive labor market report, which includes both public and private sector employment.
Lee Hardman, a currency economist at Bank of Tokyo-Mitsubishi, said in a note that the ADP report has been an inaccurate predictor of non-farm private payrolls so far in 2013, over or underestimating numbers by just under 50,000 on average each month.
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Meanwhile, the pace of activity in the services sector ticked higher in May to 53.7 from 53.1 in April, according to the Institute for Supply Management's services index. However, a key employment measure slipped to the lowest level since last July at 50.1 from 52.0.
Factory orders rose 1 percent in April, recovering from a 4.7 percent drop in March, according to the Commerce Department. Economists polled by Reuters expected to see a gain of 1.5 percent.
Euro Zone PMI Data Shows Drop for May
Earlier in the day, European stocks fell after a mixed bag of Purchasing Managers Index (PMI) indicators for May was released. The euro zone as a whole showed a slight drop, falling to 47.2, versus a flash estimate of 47.7.
European shares began the session on a back foot after a volatile session in Asia. Japan's Nikkei tumbled nearly 4 percent after Prime Minister Shinzo Abe fired his third "Abenomics" arrow, aimed at boosting growth, but failed to reassure markets.
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Meanwhile in banking news, the co-CEO of Deutsche Bank told CNBC that he was worried about regulatory "balkanization". Co-CEO Anshu Jain said: "There's no doubt that virtually every aspect of our business model — our capital ratios, our business practices — are being scrutinized and are the subject of regulation."
Tesco Trading Update Disappoints
Shares in Tesco closed around 5.2 percent down after a disappointing trading update.The U.K. supermarket reported a 1 percent fall in underlying sales in its home market in the first quarter, raising doubts about its recovery plan.
"Tesco seems to have hit a rough patch. The recent horsemeat scandal, cold weather and poor performance in the US have all put a strain on Britain's biggest grocer. Philip Clarke's turnaround plan is yet to look convincing, but it is still early days," Dan Coen, director at advisory and restructuring firm Zolfo Cooper, said in a note on Wednesday.
Leading losers was Man Group, which closed around 16.70 percent lower after it announced its flagship fund booked losses last week, wiping out its year-to-date gains. UBS downgraded the investment firm to "neutral" from "buy".
Another poor performer was Meda, with shares in the Swedish drug group sliding around 8 percent when the company confirmed it was not engaged in takeover talks.