European stocks suffered a tepid end to the week on Friday, as official data confirmed another economic slump for the UK and futures markets pointed to a tech sell-off on Wall Street later today.
The FTSE 100 (^FTSE) was down 0.3% by just before lunchtime on Friday. Data from the UK's Office for National Statistics (ONS) showed GDP shrank by 2.9% in January. While the slump was much better than forecast, the data confirmed that Britain's ongoing national lockdown is having a chilling effect on economic activity.
A separate release from the ONS showed Brexit has also hit trade between the UK and EU. Exports and imports fell by the most on record in January, the ONS said. While other factors such as stockpiling and lockdowns played a part, economists said the underlying trend was worrying.
The DAX (^GDAXI) fell 0.27% in Germany, retreating from a record high reached on Thursday. The CAC 40 (^FCHI) fell 0.1% in France. Connor Campbell, a market analyst at SpreadEx, said there was "an air of hesitation" in Europe.
Sentiment wasn't helped by movements in the US futures market.
WATCH: Biden signs $1.9tn stimulus plan into law
US stocks have been on a tear over the last few days, as Wall Street has enjoyed a tech-driven rally. That looked set to come to a screeching halt on Friday, with Nasdaq futures (NQ=F) pointing to a 1.7% slump at the open in New York. It follows a 2.5% rally for the index on Thursday.
READ MORE: UK economy shrinks less than feared in January
"Government bond yields are rising across the board, led by the US 10 year which has surpassed the 1.60% level again," said Fawad Razaqzada, a market analyst at ThinkMarkets. "This should be – and so far has been – good for the US dollar and bad news for gold and technology shares.
"The 10-year US bond yields have once again crossed the 1.6% mark after President Biden signed off on the latest $1.9trn stimulus plan, which has boosted the prospects of stronger recovery and inflation."
S&P 500 futures (ES=F) suggested a 0.6% drop at the open after the index reached a new record high overnight. Dow Jones futures (YM=F) were flat.
READ MORE: UK-EU trade crashes 40% post-Brexit — by most on record
The Hang Seng (^HSI) fell 2.1% overnight in Hong Kong as Beijing moved to tighten its grip on the island city state. China's parliament voted to approve a new law changing the Hong Kong electoral system and giving Beijing the power to veto candidates. The EU said the move "erodes" democracy in Hong Kong, while US President Joe Biden also condemned the changes.
Elsewhere, Asian markets were mostly higher overnight. Japan's Nikkei (^N225) rose 1.7%, the Shanghai Composite (000001.SS) rose 0.5%, and South Korea's KOSPI (^KS11) rallied 1.3%.
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