Europe stocks end 1.9 pct lower on weak U.S. data

PARIS, June 6 | Fri Jun 6, 2008 11:40am EDT

PARIS, June 6 (Reuters) - European stocks dropped 1.9 percent on Friday, ending at a seven-week closing low after data showed a jump in the U.S. jobless rate that sent the dollar down and led to a surge in the oil price. Banks were among the biggest losers, with UBS (UBSN.VX) down 6.4 percent and Royal Bank of Scotland (RBS.L) down 5.2 percent. The FTSEurofirst 300 .FTEU3 index of top European shares unofficially closed 1.9 percent lower at 1,285.02 points, a closing level not seen since April 15. The index lost 3.7 percent during the week.

Shares in airlines -- sensitive to high oil prices -- were among the worst hit, with Air France-KLM (AIRF.PA) down 6 percent, while exporters such as automakers got hammered as the euro rose against the greenback. BMW (BMWG.DE) shed 4.4 percent and Daimler (DAIGn.DE) fell 4.7 percent.

"This confirms that oil prices are closely following the dollar, and stocks are suffering from the spike, particularly airlines. Just look at how their shares have been dumped," said Jean-Francois Virolle, chief strategist at Global Equities, in Paris.

"Automakers are suffering too, hit from all sides: the rising euro, rising steel prices, rising oil prices...while the outlook for consumer spending is gloomy."

(Reporting by Blaise Robinson)

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