AFP/London
Better-than-expected jobs data showing the US economy is steaming ahead failed to revive Europe’s main stock markets yesterday with anxiety over Greece still weighing on sentiment.
London’s FTSE 100 slipped 0.18% to end the day at 6,853.44 points, while in Paris the CAC 40 lost 0.26% to 4,691.03 and Frankfurt’s DAX 30 index shed 0.54% to 10,846.39.
Milan dropped 0.28% but Madrid’s IBEX 35 managed a 0.36% gain.
In foreign exchange activity, the euro declined to $1.1330 from $1.1475 late in New York on Thursday.
The eagerly-awaited January jobs report showed the US economy pumped out a solid 257,000 new jobs in January, better than expected by analysts, and a sign that overall growth remains firm.
Wage growth, an indication the labour market may be tightening, rebounded firmly after a drop in December. Year-on-year wage growth increased from 1.9% in December to 2.2% in January.
Wage growth has been a key priority of the US Federal Reserve, which has signalled it wants to raise interest rates in 2015.
“Another employment report like this one for February and the stock market will most likely have to start getting its mind around a rate hike actually happening in mid-2015 after all,” said Briefing.com analyst Patrick O’Hare.
That prospect gave US stocks pause, with Wall Street opening flat, but by midday they had moved higher.
The Dow Jones Industrial Average rose 0.21% to 17,922.80 points.
The broad-based S&P 500 climbed 0.38% to 2,070.37, while the tech-rich Nasdaq Composite Index added 0.37% to 4,782.58.
On Thursday, European equities had shrugged off concerns about Greece after the European Central Bank (ECB) restricted Greek banks’ access to a key source of cash, while Germany signalled its unwillingness to reduce Athens’ debt.
Greek Prime Minister Alexis Tsipras and his Finance Minister Yaris Varoufakis, whose radical left Syriza party stormed to power in elections on January 25, have gone on a tour of major European capitals this week to try to build support for a renegotiation of the country’s bailout.
“With the unsuccessful Greek-Euro tour over, Varoufakis returned back to a Greek nation last night still firmly behind their new leaders,” said Spreadex analyst Connor Campbell.
“However, the lack of progress in negotiating a deal, something that looked so promising at the start of the week, has taken its toll on the markets” in Europe.
Greek stocks ended the day down 1.97%, but still ended the week up 11.3%.
Eurozone finance ministers will hold an extraordinary meeting in Brussels on Wednesday, with Berlin saying it expects Greece to put its plans on the table.
EU leaders are to then hold a summit meeting on Thursday.
Greece’s €240bn ($275bn) EU-IMF bailout is due to expire on February 28, leaving just weeks for Athens and Brussels to reach a compromise or risk seeking Greece crash out of the euro.
“Syriza’s rose-tinted plan to renegotiate Greece’s current debt agreement has met with a decidedly unenthusiastic response from the ECB,” added ETX Capital analyst Daniel Sugarman.
“Despite populist speeches by Mr Tsipras stressing an end to Greek economic humiliation, the ECB’s very public refusal to accept any further Greek bonds may go some way towards ending the illusion that this is a negotiation between equals rather than between debtor and creditor.”
On the corporate front in London on Thursday, Britain’s Poundland on Friday snapped up rival group 99p Stores for £55mn ($84mn, €74mn).
Visitors pass through the main entrance of the London Stock Exchange. The FTSE 100 slipped 0.18% at 6,853.44 points yesterday.
