European markets sink as energy supply risks spike; Stoxx 600 down 1.7%

The pan-European Stoxx 600 dropped 1.7% in early trade, with autos shedding 3.8% to lead losses as most sectors and major bourses slid deep into negative territory. Oil and gas stocks bucked the downward trend to add 1.3% as prices spiked once more. The sharp downward moves for risk assets came after Russia’s state-owned energy giant Gazprom announced that gas flows to Europe via the Nord Stream 1 pipeline would be halted indefinitely, citing additional repair requirements. European stocks advanced on Friday to round out a bruising week, as investors reacted to a key U.S. jobs report which showed the American economy added 315,000 jobs in August. The figure was just below the Dow Jones consensus estimate of 318,000, while the unemployment rate rose to 3.7%, slightly above expectations of 3.5%. The reading will help cool market fears that a much more buoyant labor market would give the Federal Reserve license to hike interest rates much more aggressively as it tries to rein in inflation. Overnight in Asia-Pacific markets, shares were mixed as investors digested the results of a private survey on Chinese services activity which showed the sector grew in August. U.S. markets are closed Monday for the Labor Day holiday.