European stocks advanced to a six-year high after a report showed that the US economy created more jobs last month than forecast.
Commerzbank AG climbed 4.2 percent after the lender’s chief executive officer predicted that the European Central Bank (ECB) would find no problems during an audit, while Italian and Irish banks spurred the STOXX Europe 600 Index higher as yields on the two countries’ bonds fell to the lowest level since the introduction of the euro.
Commerzbank CEO Martin Blessing predicted in an interview with Neue Zuercher Zeitung that the audit would not reveal any issues for Germany’s second-biggest bank and said that the lender’s equity ratio exceeded the minimum set by the central bank.
The STOXX 600 rose 0.6 percent to 347.13 at 4:30pm in London on Friday, compared with 344.24 on May 30, when it posted its seventh weekly advance.
The benchmark index gained 0.8 percent over the week as the European Central Bank lowered interest rates and unveiled a package of cheap loans for the eurozone’s banks.
The equity gauge has posted gains for the past eight weeks, its longest winning streak since the summer of 2012 when ECB President Mario Draghi said the financial authority “is ready to do whatever it takes to preserve the euro — believe me, it will be enough.”
“The US economy remains the main locomotive for the global economy still,” Pierre Mouton, who helps oversee about US$8 billion at Notz, Stucki & Cie in Geneva, Switzerland, said by telephone. “It is quite logical that the jobs data is taken as good news and helps markets perform well. In my view, the US economy is stronger than most forecasters maintain.”
European equities climbed on Thursday when Draghi unveiled a series of refinancing operations worth as much as 400 billion euros (US$546 billion). He also said officials would intensify work on a potential asset-purchase program.
The EU’s central bank cut its deposit rate to minus-0.1 percent, becoming the first major central bank in the world to take one of its main rates negative, while also lowering its benchmark interest rate to 0.15 percent in a bid to avoid deflation.
National benchmark indices rose in every Western European markets that opened on Friday except for Iceland. France’s CAC 40 climbed 0.7 percent, Germany’s DAX rose 0.3 percent and the UK’s FTSE 100 added 0.6 percent.
Italian lenders led a gauge of European banks higher as the country’s 10-year bond yield dropped to 2.756 percent, its lowest in more than 20 years.
Banca Monte dei Paschi di Siena SpA fell 2 percent after saying it plans to offer new shares to investors at a 35.5 percent discount in an attempt to rebuild capital, while Banca Popolare di Milano Scarl jumped 7 percent to 0.727 euros and UniCredit SpA — Italy’s largest bank — gained 1.9 percent to 0.678 euros.
Banco Popolare SC climbed 5.5 percent to 0.1480 euros.