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Europe Markets: Pound flash crash ‘spooks’ traders out of European stocks

European stocks headed firmly lower on Friday after a flash crash in the pound during Asian trading hours was seen as scaring investors out of risk assets.

Traders were also nervous ahead of the closely watched U.S. jobs data later in the day, which could help set the tone for Federal Reserve monetary policy for the rest of the year.

The Stoxx Europe 600 index SXXP, -0.80% dropped 0.3% to 341.71, extending its weekly loss to 0.4%.

“I think the pound move has possibly spooked traders but in reality, it looks like a combination of a fat finger trade, low liquidity, stops being triggered and algorithms capitalizing on the move,” said Craig Erlam, senior market analyst at Oanda, in emailed comments.

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