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LONDON -- European equity markets are trading lower Friday, extending losses after the U.S. nonfarm payroll data came in slightly worse than expected. The data showed the country raised 80,000 new jobs in June, rather than the wider consensus of 90,000, while the unemployment rate held at 8.2%.
Sentiment in Europe has been rather downbeat this morning as Spanish 10-year bond yields once again reached the unsustainable 7% level, causing concerns over the eurozone debt crisis and future economic growth to resurface.
Meanwhile, stocks have effectively shrugged off the efforts by central banks yesterday to boost the markets through reductions in interest rates and increases in quantitative easing, as well as attempts to improve interbank lending through reductions in deposit rates. The Spanish IBEX (INDEX: ^IBEX ) is one of the day's worst-performing benchmark indexes, down 1.3%.
The automotive sector is underperforming this morning, with French major Peugeot (NASDAQOTH: PEUGY.PK) leading losses, down around 6.3% after announcing that sales in the first half of 2012 slid 13% because of slowing demand in Europe. There are now rumours in the French press -- although Peugeot has denied them -- that the company will be seeking a loan from the French government, which in turn would receive a stake in the carmaker.
Elsewhere, German luxury car firm BMW (NASDAQOTH: BAMXY.PK) is seeing additional losses after it reported slower monthly sales growth. The company said sales grew just 4% in June, while first-half deliveries rose 8.3%. The news resulted in a downgrade on BMW's shares by Morgan Stanley, which cut its outlook from "overweight" to "equal-weight." BMW shares are trading about 3% lower on the day.
Dutch insurer Delta Lloyd (NASDAQOTH: DLLLY.PK) has also been seeing some strong losses this morning, down 3% following news that the U.K.'s Aviva will sell half of its shareholding in the company. Aviva said it plans to sell as many as 37 million shares, increased from its initial announcement of 25 million due to high investor demand. This comes as part of a broader move to sell off 16 noncore business units in order to shore up capital and improve share-price performance.
On the upside of the market, French chemical maker Arkema (NASDAQOTH: ARKAY.PK) has rocketed almost 16% today after a news report in the U.K. suggested that the firm has received takeover offers valuing the company at 5.5 billion euros. The report suggested that Arkema has been approached by DuPont and BASF and comes just days after it sold an unprofitable vinyl production unit for 60 million euros.
As always, this morning's European news saw some winners and losers -- and perhaps some European buying opportunities. Indeed, legendary investor Warren Buffett has recently spent more than $1 billion buying the stock of a prominent European large cap.
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