European stock markets closed lower as weak U.S. employment data dampened market sentiment, with investors also focusing on a busy earnings season and upcoming key interest rate decisions. Shares of Novo-Nordisk A/S fell after a U.S. competitor announced plans to launch a lower-cost generic version of its popular new weight-loss drug.
The Stoxx Europe 600 index closed down 1%. Mining stocks were among the biggest drags on the index, impacted by a sharp decline in silver prices. Glencore shares dropped 7%, marking their largest single-day fall since April, after Rio Tinto announced it was abandoning merger talks. Automobile and banking stocks also saw significant declines, while technology and media stocks demonstrated relative strength.
Rio Tinto and Glencore terminated their merger negotiations.
The benchmark index extended its losses following data from Challenger, Gray & Christmas Inc. showing that U.S. companies announced the highest number of job cuts for a January since the worst period of the 2009 recession during the same month. Additional data indicated that the number of Americans filing new claims for unemployment benefits last week exceeded economists' forecasts, as severe winter weather conditions suppressed business activity.
Joachim Klement, Head of Strategy at Panmure Liberum, noted, "The weak U.S. jobs data provides a clear illustration of its K-shaped economic characteristics, with the technology sector thriving while other areas struggle due to rising tariffs and shrinking demand."
In individual stock movements, Novo-Nordisk A/S shares declined 7.9% after U.S. telehealth company Hims & Hers Health Inc. announced it would launch a cheaper generic alternative to the Wegovy weight-loss drug. Germany's Rheinmetall fell 6.5% after a conference call with analysts prompted market expectations that consensus forecasts for the defense company would be lowered. Banco Bilbao Vizcaya Argentaria recorded its largest drop in ten months after the Spanish bank reported setting aside higher provisions for its key markets, including Turkey and Mexico.