|
|
European stocks rose after disappointing data showed that the US added only 74,000 net jobs during December, and the euro climbed as investors saw the US figures as a sign stimulus tapering would be delayed.
London’s benchmark FTSE 100 index posted a gain of 0.73% to 6,739.94 points, while Frankfurt’s DAX 30 rose 0.55% to 9,473.24 points and the CAC 40 in Paris climbed 0.60% to 4,250.60 points. Milan added 0.34% and Madrid rose 0.55%.
CMC Capital Markets analyst Michael Hewson called the non-farm payrolls data a “shock” and that the data showed the US economy added fewer jobs in 2013 than in 2012 despite the US Federal Reserve pumping $85bn per month into the economy.
Robert Wood at Berenberg Bank noted that the unemployment rate is now close to the 6.5% level that the Fed has set before it will consider raising interest rates from their record low level.
While the Fed has signalled it will not automatically raise its key rate from from 0 to 0.25% even when the jobless rate hits 6.5%, the low labour participation rate may encourage central bankers to look at structural reasons behind unemployment, he said.
In foreign exchange trading, the US jobs report “kneecapped” the dollar, said Hewson. “The US dollar had been performing very well until this afternoon’s payrolls numbers but those gains evaporated sharply almost immediately, and within an hour the US dollar was the worst performer...” he added.
The European single currency rose to $1.3666 from $1.3606 late on Thursday in New York, when the euro rebounded from five-week lows.
The euro climbed to 82.94 British pence from 82.54 pence on Thursday. The British pound slid to $1.674 from $1.6482.
Gold increased to $1,244.25 an ounce from $1,226 Thursday on the London Bullion Market.
Among European shares, Hewson said basic resource stocks performed well yesterday thanks to stonger commodity prices and data showing Chinese imports increased by 8.3% in December.
Glencore Xstrata climbed 2.9% to 318.75 pence, Rangold rose 2.9% to 3,712 pence, AngloAmerican added 1.9% to 1,249.5 pence and Antofagasta gained 1.8% to 782 pence.
Shares in Tullow Oil jumped 7.6% to 909.5 pence on speculation Norway’s Statoil may be interested in snapping it up, according to Hewson.
US stocks opened higher, but then turned lower following a number of gloomy announcements by companies. The Dow Jones Industrial Average fell 0.28% to 16,398points in midday trade.
The broadly based S&P 500 shed 0.24% to 1,833.74 points, while the tech-rich Nasdaq Composite Index gave up 0.22% to 4,146.92.