Shares in Unicredit plunged 4.05% yesterday to close at €5.60 after leaks to the media that the Italian bank could cut some 10,000 jobs, or nearly 7% of its workforce. The Milan market finished down 3.18%.

AFP/London

European stocks fell sharply yesterday, giving back gains made the previous day, as a mixed US jobs report left investors guessing whether US interest rates would rise later this month.
London’s benchmark FTSE 100 index dropped 2.44% to close at 6,042.92 points. the CAC 40 in Paris sank 2.81% to 4,523.08 points, while Frankfurt’s DAX 30 lost 2.71% to end at 10,038.04 points.
Market attention was on the US non-farm payroll data, with the information seen as possibly being key in the decision about whether to raise rates when the US Federal Reserve meets in less than two weeks.
The US Labour Department report showed the economy added 173,000 jobs — fewer than estimated.
However, the previous two months’ job gains were revised upward, pushing the unemployment rate down more than expected to 5.1% in July, its lowest level since April 2008.
In European securities, shares in Unicredit plunged 4.05% to close at €5.60 after leaks to the media that the Italian bank could cut some 10,000 jobs, or nearly 7% of its workforce. The Milan market finished down 3.18%.
“There was something for everyone in yesterday’s US Employment Report, which probably explains why there was little change in the financial markets once the dust had settled,” said John Higgins, analyst at Capital Economics.
“Given the lack of a clear steer from the report, we continue to think that the probability of US monetary policy being tightened later this month is around 50:50,” he said.
Investors have been weighing the likelihood of a Fed increase to zero-level interest rates this month or whether recent market volatility and a somewhat hesitant US recovery will convince policymakers to push it back several months.
Rob Carnell at ING bank said: “We don’t think it is sufficiently strong enough for the Fed to proceed with a September rate hike without markets worrying that the data is not good enough to support it.”
Wall Street stocks also tumbled yesterday on the US employment report.
Near mid-day in New York, the S&P 500 was down 1.47%, the Dow Jones Industrial Average fell 1.45%, and the Nasdaq Composite shed 1.03%.
The euro added to its sharp drop on Thursday when it lost a cent following the ECB’s pledge to step up stimulus if necessary, slipping to $1.1114 from $1.1127 late in New York.
Japanese stocks led a broad Asian stock slide yesterday also on concerns of a US interest rate hike, with Tokyo’s Nikkei index stumbling 2.15% to a seven-month low.
However, Sydney bounced back from early selling to end 0.25% higher.