Euro shares slammed lower on Spanish fears, weak data;DAX off 1.01%

Investing.com - European stocks traded sharply lower Friday, as weak U.S. data combined with Spanish bailout fears to push equity

At the close of European trade, the EURO STOXX 50 plunged 2.07%, France’s CAC 40 was slammed  2.46%, while Germany’s DAX 30 gave back 1.01%.
 
Fueling the sentiment on the day, the U.S.’s Chicago PMI fell unexpectedly last month, data showed on Friday.

In a report, research group Kingsbury International said that the Chicago PMI fell to a seasonally adjusted 49.7, from 53.0 in the preceding month.

Analysts had expected the Chicago PMI to remain unchanged at 53.0 last month. 

Meanwhile,  U.S. personal spending rose last month, official data showed on Friday.

In a report, the Bureau of Economic Analysis said that personal spending rose to a seasonally adjusted 0.5%, from 0.4% in the preceding month.

Analysts had expected personal spending to rise 0.5% last month. 
In bearish news, U.S. personal income rose less-than-expected last month, official data showed on Friday.

In a report, Bureau of Economic Analysis said that U.S. Personal Income rose to a seasonally adjusted 0.1%, from 0.1% in the preceding month whose figure was revised down from 0.3%. 

Preliminary data showed that consumer price inflation in the euro zone rose unexpectedly in September, ticking up to an annualized rate of 2.7%, from 2.6% the previous month, compared to expectations for a decline to 2.4%. 

The report came after the Spanish government announced on Thursday a crisis budget for 2013, based mostly on spending cuts, in what many analysts see as an effort to pre-empt the likely conditions of an international bailout. 

Ministry budgets were slashed by 8.9% for next year and public sector wages frozen for a third year as Prime Minister Mariano Rajoy battles to trim one of the euro zone's biggest deficits. 

Investors remained cautious however, as the results of Spanish bank stress tests were due later Friday. In addition, ratings agency Moody’s was expected to complete a ratings review on Spain. 

Financial stocks were broadly higher, as shares in French lenders Societe Generale and BNP Paribas climbed 0.57% and 1.29%, while Germany's Deutsche Bank and Commerzbank advanced 1.26% and 1.86% respectively. 

Peripheral lenders also posted sharp gains, with Spanish banks BBVA and Banco Santander rallying 0.96% and 1.17%, while Italy's Intesa Sanpaolo and Unicredit added 0.74% and 0.84%. 

Elsewhere, Danish pharmaceutical company Novo Nordisk rose 0.71% after saying Japan’s Ministry of Health, Labour and Welfare approved Tresiba, its insulin drug used in treating diabetes. The company expects to start selling the drug in Japan after price negotiations are completed. 

In London, FTSE 100 gave back 0.65%, supported by strong gains in financial and mining stocks. 

U.K. lenders tracked their European counterparts higher, as shares in HSBC Holdings added 0.16% and Lloyds Banking climbed 0.94%, while the Royal Bank of Scotland and Barclays jumped 1.23% and 2.23% respectively. 

Meanwhile, mining giants Rio Tinto and BHP Billiton rallied 1.60% and 1.01%, while copper producers Xstrata and Kazakhmys gained 1.67% and 1.58%. 

On the downside, Electrocomponents dove 8.19% after the company said full-year pretax profit will be "slightly below" the lower end of analyst estimates of between GBP110 million pounds and GBP120 million. 

In the U.S., equity markets followed lower with the Dow Jones down 0.44%, the S&P 500 off by 0.59% and the tech heavy Nasdaq lower by 0.58% in afternoon trade.

Also Friday, data showed that German retail sales rose by 0.3% in August, less than the expected 0.5% increase, following a 1% drop the previous month. 

In France, official data confirmed that the economy stagnated in the second quarter, in line with expectations.