European stocks notched up their biggest weekly fall since December on Friday, extending losses as weak China and German data and poor US jobs numbers tightened bears' grip on the market, underscoring worries about a global economic slowdown. The STOXX 600 fell 0.8 percent on the day for its biggest weekly fall since Dec. 21, when a sharp sell-off was sweeping global markets.
Losses deepened in afternoon trading after US data showed the employment market stalled last month, creating only 20,000 jobs, the weakest since September 2017. "A 20,000 jobs print will be the talk of markets for days to come, but with the previous month revised up to 311,000, the average of the two, 155,500, is still a respectable number," said Chris Beauchamp, chief market analyst at IG.
Euro-zone bank stocks extended Thursday's fall after the European Central Bank cut its growth forecasts and pushed out an interest rate hike. In contrast, real estate stocks jumped 1.9 percent as investors bet on lower-for-longer borrowing costs boosting the housing market.
Basic resources fell 1.7 percent and autos stocks tumbled 1.3 percent after China reported its biggest drop in exports in three years and German industrial orders unexpectedly fell.
Germany's DAX was down 0.5 percent. "The weakness in soft data since September is starting to impact hard data, so central banks are reacting," said Sophie Huynh, multi-asset strategist at Societe Generale.
But she added "we should not over-interpret the China trade data because we have to take into account Chinese New Year and potential front-loading." Oil stocks were dragged lower by weak crude prices and news that Norway's sovereign wealth fund, the world's largest, will sell its stakes in oil and gas explorers.
Falls in European shares were muted compared to the 4 percent drop in Shanghai stocks after a blistering rally.
"In euro zone stocks there is already so much (investor) capitulation, it is so under-owned, that the reaction will naturally not be as sharp as in China, a much more high-beta market," said Huynh. EPFR data showed investors pulled some $3.1 billion from European equity funds this week, driving total outflows from the region year-to-date to $25.9 billion.
Company news provided no silver linings, with results roundly disappointing investors. EssilorLuxottica shares fell 6.3 percent after the merged eyewear group's maiden set of results disappointed the market and it postponed a long-awaited investor day.
"Broadly speaking, EssilorLuxottica's first set of results for 2018 have essentially been penalised by the dollar, and that is what's hitting the shares sharply this morning," said Gregoire Laverne, European equity manager at Roche-Brune Asset Management in Paris. Swiss industrial machinery firm VAT Group tumbled
4.1 percent after it reported lower full-year earnings than expected and a weaker guidance for 2019. "Overall, we see around 10 percent downside risk to consensus 2019 earnings," said UBS analysts.
Iliad shares fell 5.3 percent after Exane downgraded the French telecoms stock to "underperform".
Leading the losers was British gambling firm GVC Holdings , which sank 14 percent to the bottom of the STOXX after its CEO sold 2.1 million shares in the company. Mounting evidence of a global economic slowdown kept downward pressure on world earnings expectations. Analysts now see 2019 earnings growth at just 4.4 percent, less than half the growth they expected back in October.
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