European stocks slide before US payrolls report

London - A third day of losses sent European stocks toward a second weekly decline and an almost two-week low, as investors awaited a US jobs report.

The Stoxx Europe 600 Index dropped 0.5% at 09:16, as all industry groups except miners declined. The benchmark has declined 0.5% this week, as its longest stretch without losses in almost a year unraveled amid concern the European Central Bank may turn less accommodative.

Investors are awaiting more evidence on the health of the US economy to gauge the prospects for another Federal Reserve rate increase this year. Payrolls rose at a faster pace in September from a month earlier, economists forecast before the release due later today. Traders are pricing in a 24% chance of a hike in November and 64% probability of one in December.

Earlier today, two minutes of chaos in Asian trading sparked a plunge in the pound that traders said was exacerbated by computer-initiated sell orders.

The currency, already in freefall amid worries about a so-called hard Brexit, tumbled 6.1%, the biggest since the UK voted to leave the European Union, before paring the drop. The FTSE 100 Index rose 0.4%, boosted by gains in commodity producers, with Anglo American and BHP Billiton up at least 2.5%.

Among stocks active on deal activity, ABN Amro gained 1.7%. Sweden’s Nordea Bank AB proposed a merger with the Netherlands’ state-owned lender, before the Dutch government ultimately rejected it, a person familiar with the matter said.

Delta Lloyd added 1.5% after rejecting NN’s unsolicited €2.4bn cash offer, saying it undervalued the company. E.ON rose 2.7% after a report that Cevian Capital is evaluating buying a 10% stake in the German utility.

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