Stocks Slide As European Political Fears Top Agenda

LONDON, Dec 2, (APP - UrduPoint / Pakistan Point News - 02nd Dec, 2016 ) - European stocks fell Friday in nervy trade before Italy's crunch referendum and Austria's elections, amid fears that both could send shockwaves reverberating across markets.

Four weeks since Donald Trump's stunning US election victory and five months after Britons voted to leave the European Union, this weekend's eye-catching events are squarely in the spotlight. Italy goes to the polls on Sunday for a referendum on constitutional reform, with Prime Minister Matteo Renzi saying he will resign if his government loses, which may trigger a general election.

Austria's presidential election, also due Sunday, pits far-right hopeful Norbert Hofer against Greens-backed candidate Alexander Van der Bellen. "European equities finished the week on a downbeat note, with most major indices ending both the day and the week lower," said market analyst Jasper Lawler at CMC Markets.

"Rising political risk in Europe is seeing funds flow to the US where companies potentially stand to benefit from lower taxes and regulation under Donald Trump," he added.

Milan shares ended the day down just 0.07 percent, although bank shares continued to be punished by investors as plans to recapitalise several lenders could be complicated by political volatility.

Meanwhile London gave up 0.3 percent, Frankfurt dipped 0.2 percent and Paris fell 0.7 percent. In New York, US stocks were mostly higher after data showed the US unemployment rate dropped in November to its lowest level since August 2007, all but guaranteeing an interest rate hike by the Federal Reserve later this month.

The jobless rate fell three-tenths of a percentage point to 4.6 percent, with a solid 178,000 net new positions created, in line with analysts' expectations. Despite an interest rate hike being positive for the Dollar, it was down against the euro, Yen and pound in late European trading, which analysts put down to the markets having already priced in a December move by the Fed.