Sun, Jun 05, 2005 - Page 10 News List

European markets end week lower on weak US jobs data


European stock markets closed lower on Friday, depressed by US employment figures.

The London FTSE 100 index eased 0.11 percent to 4,999.4 points, the Frankfurt DAX 30 edged down 0.48 percent at 4,510.39 points, while in Paris the CAC 40 dropped 0.51 percent to 4,162.47.

The DJ Euro STOXX 50 index of leading eurozone shares declined 0.54 percent to 3,114.27 points.

The euro was being quoted at US$1.2345, after having slipped to US$1.2220 in response to remarks by Italian Social Affairs Minister Roberto Maroni that Italy should consider re-introducing temporarily the lira alongside the single European currency.

Markets were unsettled by US figures showing the weakest rate of job creation since August 2003 last month.

Analysts played down fears of an economic slowdown but suggested the US Federal Reserve might pause for thought in its current program of tightening US borrowing costs.

According to the Labor Department's closely watched non-farms payroll report, the world's biggest economy created just 78,000 more jobs in May, the smallest rise in 21 months and down from 274,000 in April.

Last month, the report showed an unemployment rate of 5.1 percent, down from 5.2 percent in April and the lowest rate since September 2001.

Experts say the total number of jobs created is a more reliable indicator of the US economy's health than the unemployment rate. Strong job creation encourages consumer spending, the motor of the economy.

A payroll figure of 150,000 a month is seen as the minimum to keep pace with population growth. Wall Street was betting on an increase of 175,000 last month.

In London, British Airways lost early gains prompted by news of a 3.2 percent growth in traffic in May as investors were scared off by a rise in oil prices. BA shares closed down 1.19 percent at ?2.70.

Miners were in demand after BHP Billiton finally wrested control of WMC Resources.

BHP shares rose 0.44 percent to ?6.8650. Rio Tinto closed up 0.60 percent at ?16.79. Xstrata managed to hold on to its gains, climbing 0.4 percent to ?10.12.

Oil companies failed to profit from higher oil prices, BP losing 0.36 percent to ?5.61 and Shell ending 0.51 percent down at ?4.88.

In Frankfurt the fall in the value of the euro and a good performance by Infineon saw the market off to a good start but the US figures sent shares down.

In the end Infineon was one of a small number of stocks to show a price rise, up by 0.81 percent at 7.51 euros. It announced a management buy-out of its so called "smart" clothes sector.

Cars and chemicals, which had done well in recent days following the drop in the value of the euro, ended down, in spite of good figures for May sales in Germany.

Elsewhere in Europe, the Swiss Market Index fell 0.30 percent to 6,210.13 points, the Amsterdam AEX lost 0.24 percent at 371.52 points, the Madrid IBEX-35 dropped 0.44 percent to 9,497.70 and the Milan SP/MIB shed 0.56 percent at 31,958.0.

The Brussels BEL-20 gained 0.28 percent at 3,083.54.

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