Europe stocks hang on to gains after weak US data


08/02/2014 09:59 AST

Europe’s main stock markets hung on to small gains yesterday despite disappointing data showing the US economy is not adding many jobs despite an accelerating recovery.

At close, London’s benchmark FTSE 100 index ended the day up 0.20% at 6,571.68 points.

Frankfurt’s DAX 30 rose 0.49% to 9,301.92 points and the CAC 40 in Paris climbed 0.96% to 4,228.18 points.

The European single currency rose against the dollar, but dipped against the pound.

US stocks also moved higher despite a US employment report that showed surprisingly weak jobs growth in January.

In midday trading, the Dow Jones Industrial Average advanced 0.43% to 15,695.07.

The broad-based S&P 500 rose 0.73% to 1,786.39, while the tech-rich Nasdaq Composite Index jumped 1.07% to 4,100.48.

The gains followed a US Labor Department report that said the US economy added just 113,000 jobs in January, far fewer than the analyst consensus forecast of 175,000.

That marked the second disappointing jobs report in a row after US jobs growth in December came in at a paltry 75,000, far below the 194,000 monthly average for 2013.

Asian equities rose after a strong Wall Street rally Thursday sparked by earlier upbeat figures on the US labour market.

Tokyo stocks rallied 2.17%, Hong Kong rose 1.0% and Sydney won 0.68%.

Shanghai—on its first day open after a week-long Lunar New Year holiday—closed 0.56% higher.

Yesterday’s non-farm payroll figures are used as a gauge for the strength of the US economy and have taken on huge significance since the Federal Reserve began winding down its stimulus programme from last month.

The US central bank’s recent decision to reduce the bond-buying scheme further sent world markets into a tailspin as investors worried about the impact on emerging markets.

The disappointing figures came after conflicting data on Thursday showing new claims for US unemployment insurance benefits, which indicate the pace of layoffs across the economy, fell back last week. In foreign exchange, the euro pushed higher after enjoying a rally on Thursday in response to the European Central Bank’s decision to keep interest rates unchanged, despite fears of deflation in the eurozone.

The single European currency was not hit by Germany’s top court voicing doubts yesterday about the European Central Bank’s bond-buying programme, which has been credited with calming the eurozone crisis.

But instead of rejecting the programme, Germany’s Constitutional Court sent the case to the European Court of Justice, which was taken as a positive sign by many experts.

The European single currency rose to $1.3611 yesterday, from $1.3591 late in New York on Thursday.

The euro meanwhile eased to 83.02 British pence from 83.25 pence, while the British pound rose to $1.6395 from $1.6323 on Thursday.

The price of gold gained to $1,259.25 an ounce from $1,256.50 an ounce on Thursday.

On the corporate radar yesterday, shares in ArcelorMittal surged 0.81% to 12.50 euros in Paris.

The steelmaker announced it slashed its net loss by a quarter last year as it turned in surprisingly strong operating figures.

ArcelorMittal also reported strong progress in cutting net debt.

Air France-KLM lost 3.64% to 8.37 euros on reports the airline was exploring a capital raising drive.

In Frankfurt, German airline Lufthansa named Carsten Spohr, currently head of its passenger business, to take over as chief executive in May.

The news sent Lufthansa shares flying 1.26% to 17.62 euros.

AFP
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