Europe markets close down after weak China, US data; Sterling sinks on Brexit deadlock

Key Points
  • European stocks were lower Friday as investors digested poor Chinese data and the announcement of more ECB stimulus.
  • Friday also saw disappointing data from the U.S., with numbers showing job growth almost stalled in February.
  • Sterling whipsawed on Brexit related fear.

Stocks in Europe fell during Friday's session amid poor U.S. data and as investors continued to digest news of further stimulus in the euro zone.

The pan-European Stoxx 600 was provisionally down 0.78 percent percent during Friday trade, with every sector but telecoms in the red. All major European bourses were in negative territory too.

Market sentiment was influenced by weaker-than-expected Chinese trade data. Chinese exports dropped 20.7 percent in February from a year ago, which has raised questions about broader economic growth in the region — a key element to global growth. Friday also saw disappointing data from the U.S., with numbers showing job growth almost stalled in February.

Sterling dipped sharply hit a two week low as doubts existed over whether Europe and the U.K. could break the Brexit deadlock. There are three weeks until Britain leaves the European union and still no deal has been arranged.

Stateside, stocks opened lower as investors reacted to the weak figures. Wall Street's poor performance during early trade signaled the fifth consecutive day of losses.

Back in Europe, investors are still digesting an announcement from the European Central Bank (ECB) Thursday. President Mario Draghi unveiled a fresh round of loans to boost lending in euro zone banks and, thus, stimulate the real economy. He also said that interest rates would continue to remain at current levels for at least until the end of the year. The ECB also slashed its growth forecast for the euro zone from 1.7 to 1.1 percent for this year.

"The European Central Bank tried to get ahead of the curve. The measures demonstrate the ECB's determination but will do little to tackle the drivers of the current slowdown," Carsten Brzeski, chief economist at ING Germany, said in a note Thursday.

Euro zone government bond yields extended their falls into Friday on the back of the central bank's announcement.

Vonovia was a top performer in Europe after reporting strong full-year results, Reuters reported. Meanwhile, shares of GVC dropped about 12 percent after its chairman and CEO sold shares of the firm.

In other corporate news, reports emerged on Friday that the CEOs of Deutsche Bank and Commerzbank had resumed merger talks. Many analysts have been critical of the rumored merger, with European regulators saying it would not give either lender a much-needed profit boost. Commerzbank stock fell 2 percent on the back of the news, while Deutsche Bank was 1.4 percent lower.

Elsewhere, the U.K.'s Foreign Minister Jeremy Hunt said Friday morning that there had been progress in Brexit talks over the last few days. "There's a bit more to make. It's entirely possible to get there," he said, according to Reuters.

The EU urged the U.K. to come up with proposals to overcome the impasse over the Irish border by Saturday to ensure that there is a positive outcome next week, when U.K. lawmakers vote on the Brexit deal. Pressure is mounting ahead of March 29 departure deadline.