European Shares Plunge Amid Global Risk-Off Sentiment

European shares dropped by over 1% on Friday following weak U.S. growth data. The pan-European STOXX 600 index declined significantly, touching a three-month low. Despite gains in defensive stocks, most sub-indexes, particularly technology and financial sectors, suffered. The sentiment was further impacted by disappointing U.S. manufacturing data.

European shares took a significant hit on Friday, falling over 1%, as global markets reacted nervously to disappointing U.S. growth data. The STOXX 600 index dropped 1.4%, hitting a three-month low earlier in the day and is poised to end the week with a 1.5% decline.

The technology and financial sectors suffered the most, with the former plummeting 3.6% to a six-month low and the latter dropping 3.2%. Lower rates could potentially impact interest margins, a primary income source for banks.

The risk-off sentiment, originating from a poor U.S. manufacturing report, also impacted Asian markets before sweeping through Europe. Investors are now eyeing U.S. labor market data, anticipating further market turbulence. Meanwhile, British Airways owner IAG and French energy company Engie posted gains following strong financial performance and optimistic forecasts.