UPDATE 2-European shares pop two weeks of gains as growth fears weigh


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    * Lufthansa ground staff agree pay deal after strike
    * Deutsche Post tops STOXX 600 on Q2 beat
    * STOXX down 0.6% on the week

 (Updates to close; adds comment, details, graphic)
    By Bansari Mayur Kamdar and Anisha Sircar
    Aug 5 (Reuters) - European shares fell on Friday after a
stronger-than-expected U.S. jobs report ramped up bets of
another 75 basis point rate hike by the Federal Reserve next
month, while fears of a darkening growth outlook pushed shares
towards weekly losses.
    The pan-European STOXX 600  .STOXX  was down 0.8%, extending
losses from earlier in the day after U.S. nonfarm payrolls were
shown to increase by 528,000 jobs last month, the largest gain
since February.  urn:newsml:reuters.com:*:nL1N2ZG2G3
    The benchmark has lost 0.6% this week, snapping two weeks in
positive territory, on worries over dour economic data from the
region, rising geopolitical tensions and fears that higher
interest rates could tip the economy into a recession.
    "The data published this week add to the evidence that a
recession is just around the corner," said Jack Allen-Reynolds,
senior Europe economist at Capital Economics.
    Figures this week also showed euro zone retail sales plunged
in June and factory gate prices continued to rise, while euro
zone business activity contracted in July for the first time
since early last year.  urn:newsml:reuters.com:*:nL8N2ZF39I
    "Forward-looking indicators suggest that worse is to come...
If we are right, the European Central Bank will raise interest
rates more aggressively than is currently priced into the
market, and the economy will underperform consensus forecasts."
    Euro zone government bond yields jumped, with Germany's
10-year bond yield last up 9 bps at 0.89%.  DE10YT=RR   GVD/EUR 
    Company results were mixed on Friday, with Deutsche Post
 DPWGn.DE  up 4.6% after posting double-digit growth in revenue
and earnings.  urn:newsml:reuters.com:*:nL8N2ZH0Q9
    London Stock Exchange Group  LSEG.L  gained 1.6% on saying
costs and savings targets for integrating its $27 billion
acquisition of data company Refinitiv remain unchanged and it
was launching a 750 million pound ($910.65 million) share
buyback.  urn:newsml:reuters.com:*:nL8N2ZH18Z
    Allianz  ALVG.DE  fell 1.6%. The insurer spent around 140
million euros ($143.11 million) on restructuring to wind down a
U.S. funds unit at the centre of a multi-billion fraud, and
posted a worse-than-expected 23% fall in quarterly profit.
    Ground staff of Germany's Lufthansa  LHAG.DE  and management
reached a pay deal after negotiations, averting further walkouts
during the busy summer travel season. Shares of the carrier rose
4.0%.  urn:newsml:reuters.com:*:nL1N2ZG242
    Miners  .SXPP  were the biggest gainers, jumping 1.1%,
tracking a rise in prices of copper and other base metals as
investors focused on low inventories and threats to supply.
    Oil stocks  .SXEP  reversed early declines to inch 0.6%
higher on the back of a rebound in crude prices.
    German industrial production posted an unexpected but modest
increase in June, official data showed, despite supply chain
problems weighing on manufacturing.  urn:newsml:reuters.com:*:nL8N2ZG651

G10 interest rates    https://tmsnrt.rs/3JwnLLj
Euro earnings    https://tmsnrt.rs/3Snr63D
 (Reporting by Bansari Mayur Kamdar and Anisha Sircar in
Bengaluru; Editing by Shounak Dasgupta and Christina Fincher)
 ((BansariMayur.Kamdar@thomsonreuters.com; Twitter:
@bansarikamdar https://twitter.com/BansariKamdar))

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