European stocks posted their biggest weekly advance in two months as employers in the US increased their payrolls more than forecast and optimism mounted that central banks would continue to stimulate their economies.
Vodafone Group PLC posted its largest weekly gain since November 2008 after Verizon Communications Inc was said to seek a resolution of their relationship. Fugro NV jumped after reporting earnings that beat analysts’ estimates. PSA Peugeot Citroen, Europe’s second-biggest carmaker, rallied.
The STOXX Europe 600 Index gained 2.3 percent to 295.55 this week, closing at the highest level since June 2008. The equity benchmark has surged 5.7 percent so far this year as US politicians agreed on a compromise budget and the US Federal Reserve continued its bond-buying program.
“US and European monetary policy has helped stocks,” said Jerome Forneris, a fund manager at Banque Martin Maurel in Marseille, which oversees US$8.5 billion. “And jobs data in the US was good. The market is being lifted by the economies in the US and Japan and global growth.”
In the US, a Department of Labor report showed that the economy added workers at a faster pace last month and the unemployment rate unexpectedly fell to a four-year low of 7.7 percent. Employment rose 236,000 last month after a revised 119,000 gain in January that was smaller than initially estimated, the release showed on Friday.
Fed Vice Chairman Janet Yellen said on Monday that the central bank should continue with its US$85 billion in monthly bond buying.
Yellen, who is second to Fed Chairman Ben Bernanke, said that the benefits of historically low interest rates and the near-record US$3.09 trillion balance sheet outweigh any risk of financial instability.
In Japan, GDP rose an annualized 0.2 percent in the three months through December last year, Japan’s Cabinet Office said on Friday. The world’s third-largest economy contracted 3.7 percent in the previous quarter.
In China, exports increased 21.8 percent last month from a year earlier, the country’s customs administration said on Friday.
That beat the 8.1 percent median estimate in a Bloomberg News survey. Last month had four fewer working days than in the same month last year.
The European Central Bank kept its benchmark interest rate unchanged at a record low of 0.75 percent this week. The Bank of England also left its key rate unchanged, along with its four- year-old bond-purchase program.
National benchmark indexes climbed in every western European market except Greece. France’s CAC 40 Index jumped 3.8 percent and the UK’s FTSE 100 Index rose 1.6 percent. Germany’s DAX rallied 3.6 percent.