Sun, Jan 09, 2005 - Page 10 News List

European markets shrug off US payroll data to close higher


European stocks ended higher on Friday as markets shrugged off slightly softer-than-expected payroll figures from the US.

The prospect of another rate hike by the US Federal Open Markets Committee has already been factored into the market, said trader Geoff Langham at Spreadbettor CMC. The week as a whole, he said, has offered "a rather muted start to the New Year."

The Dow Jones STOXX 600 Index, which tracks Europe's 600 largest listed companies, was up 0.6 percent at 254.60. The Dow Jones Euro STOXX Index, which tracks companies in countries that joined the common currency, was 0.4 percent higher at 270.48.

At the close of trading, Lon-don's FTSE-100 Share Index was 0.6 percent higher at 4,854.10, while in Paris the CAC-40 Index was 0.6 percent higher at 38,877.96. Frankfurt's Xetra Dax Index was up 0.4 percent at 4316.4.

The US December non-farm payroll report offered support to the Fed's view that the US labor market is improving, said economists at ING, who agree the market is eyeing a further 25-basis-point hike Feb. 2.

Looking ahead, ING now expects the Fed to "raise rates at each of its meetings up until August."

On the corporate side, Schering's share price fell off sharply as the Food and Drug Administration requested more data on its Bonefos drug, delaying approval for a new use.

London Stock Exchange remained in focus as talk centered on possible bids for the exchange from Euronext and Deutsche Boerse. One UK-based analyst said his "gut feeling" is that any Deutsche Boerse effort to buy the LSE is doomed to fail because people on both sides would be hostile to such a deal. He also pointed out that questions remain over Euronext's ability to make a cash offer.

London Stock Exchange finished 0.2 percent higher at ?5.84, whilst Deutsche Boerse was 0.3 percent weaker at 44.60 euros (US$58.87). Euronext gained 0.3 percent to finish at 22.24 euros (US$29.36).

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