European stocks slumped the most in five months as U.S. employers hired fewer workers than forecast and airline shares fell as a bird flu spread in China.
Air France-KLM Group and International Consolidated Airlines Group SA tumbled more than 6 percent amid speculation the rising death toll from a new strain of bird flu in China will hurt demand for travel. Daimler AG and Xstrata Plc paced a selloff in carmakers and materials companies. National Bank of Greece SA and Eurobank Ergasias SA sank more than 11 percent.
The Stoxx Europe 600 Index lost 1.6 percent to 287.13 at the close of trading, the largest decline since Oct. 23. The gauge has retreated 2.3 percent this week, the most since November, as U.S. reports on jobless-benefit claims and service-industry growth also fell short of forecasts. The measure has still climbed 2.7 percent this year.
Today’s jobs data provides a “little dose of realism,” said Justin Urquhart Stewart, who helps oversee about $6.8 billion at Seven Investment Management Ltd. in London. “If you join the dots together, the economy is getting slower. There will still be growth, but it’s at a lower, slower level. Therefore, the market shouldn’t get too far ahead of itself.”
U.S. payrolls grew by 88,000 workers in March, the smallest gain in nine months. That missed the median economist for an advance of 190,000 in a Bloomberg Survey and followed a revised 268,000 increase in February.
In North Korea, the government asked Russia and other states to consider evacuating their diplomats from the capital, Pyongyang, as tensions mount with its southern neighbor. A crisis is escalating after the communist nation threatened to wage nuclear war on the U.S. and South Korea.
Portugal’s Constitutional Court will rule today on the legality of some elements in Prime Minister Pedro Passos Coelho’s 2013 budget that may challenge the government’s ability to meet deficit targets. President Anibal Cavaco Silva and various political groups asked the court in January to review some points of the budget, including taxes on pensions.
“With the concerns that we have seen in Europe, and now Korea, there are enough reasons to take home some profit,” said Urquhart Stewart.
National benchmark indexes fell in all 18 markets in western Europe today, except Italy. Germany’s DAX retreated 2 percent and France’s CAC 40 declined 1.7 percent. The U.K.’s FTSE 100 slid 1.5 percent.
Air France lost 7.8 percent to 6.74 euros, leading a gauge of travel companies in the Stoxx 600 to the biggest slump in more than 18 months. As the death toll in China from the new bird flu strain, known as H7N9, rose to six people, authorities in Shanghai shut several poultry markets and culled birds in an effort to contain the virus.
IAG sank 6.9 percent to 234.9 pence in London and Deutsche Lufthansa AG tumbled 5.2 percent to 14.14 euros in Frankfurt.
EasyJet Plc retreated 6.4 percent to 1,027 pence, the biggest drop in 13 months, even as Europe’s second-largest discount carrier cut its first-half pretax loss forecast amid a surge in late bookings for Easter.
The world’s airlines suffered a $10 billion loss a decade ago on the SARS outbreak that killed 774 people in 2002 and 2003. At the peak of the outbreak, carriers including including Singapore Airlines and Hong Kong’s Cathay Pacific, cut more than 1,150 weekly flights.
Daimler paced a selloff in carmakers, dropping 2.3 percent to 41 euros in Frankfurt. Bayerische Motoren Werke AG declined 1.9 percent to 66.31 euros, while Renault SA slid 1.6 percent to 49.60 euros in Paris trading.
Basic-resources companies also fell, sending an industry gauge lower for a seventh straight week, the longest losing streak in 13 years. ArcelorMittal retreated 2.8 percent to 9.25 euros, Xstrata Plc slid 2.9 percent to 1,020.5 pence and Glencore International Plc dropped 2.8 percent to 338.9 pence.
National Bank of Greece slid 11 percent to 52 euro cents and Eurobank plunged 21 percent to 15 cents, the lowest prices ever in Bloomberg data going back at least 14 years. European authorities will consider the impact on sovereign finances of the Greek banks’ proposed merger, European Commission spokesman Olivier Bailly said.
Ladbrokes Plc plummeted 7 percent to 207.5 pence, the biggest decline in nine months, as Deutsche Bank AG downgraded the U.K. gambling operator to hold from buy.
Telecom Italia SpA climbed 1 percent to 58.4 euro cents, extending yesterday’s 7.8 percent advance, as the company said it’s examining a possible merger with Hutchison Whampoa Ltd.’s Italian division, H3G SpA.
Eurasian Natural Resources Corp. gained 3.4 percent to 243.1 pence as analysts at both UBS AG and Liberum Capital Ltd. raised their recommendation for the mining company to buy. UBS cited recent share-price weakness while Liberum said capital-raising concerns were now priced into the stock.