Sun, Oct 05, 2014 - Page 15 News List

European stocks record weekly loss on ECB decision


European stocks rebounded on Friday from the biggest selloff in 15 months as a US report showed better-than-estimated hiring sent the unemployment rate in the world’s largest economy to a six-year low.

EasyJet PLC rallied the most since November after saying full-year pretax profit jumped at least 20 percent. Immofinanz AG advanced 2.5 percent after UniCredit SpA agreed to sell its stake in an Austrian real-estate unit to another bidder.

Greek stocks fell for a third day, posting the worst performance among markets in Western Europe.

The STOXX Europe 600 Index gained 1 percent from Thursday to close at 335.19 on Friday in London. The equity benchmark plunged 2.4 percent on Thursday amid concern the European Central Bank’s (ECB) asset-buying plan would not be enough to revive the region’s economy.

“It’s a bit of a bounce for European markets from yesterday’s selloff,” Andrea Williams, who helps oversee £50 billion (US$80 billion) at Royal London Asset Management, said by phone from London. “We’re on the brink of the third-quarter earnings season. If we start to see earnings upgrades, that should support markets.”

The US jobless rate declined last month to 5.9 percent, the lowest level since July 2008, and employers added more workers than projected, US Labor Department data showed. The 248,000 gain in payrolls followed a 180,000 August increase that was bigger than previously estimated. The median forecast of economists in a Bloomberg survey called for a 215,000 increase.

The STOXX 600 registered a second weekly loss, extending its decline from a six-year high reached in June to 4.2 percent.

The VSTOXX Index, a gauge measuring volatility expectations in the eurozone, dropped 6.6 percent on Friday. The measure jumped 11 percent on Thursday, the most on an European Central Bank (ECB) rate-announcement day since at least January last year. It fell seven out of 10 times on those days.

“Investors are disappointed because the ECB did not come out with the big guns,” Jacques Porta, who helps oversee about US$780 million at Ofi Gestion Privee in Paris, said on Thursday. “Given the significant risk of deflation in the euro area, the ECB’s actions seem a little weak.”

National benchmark indices rose in 14 of the 17 Western European markets open on Friday. The UK’s FTSE 100 jumped 1.3 percent and France’s CAC 40 rallied 0.9 percent. Germany was closed for National Day.

Greece’s benchmark ASE Index fell 0.8 percent. ECB officials will require Greece to stay under economic surveillance to be eligible for the asset-purchase program being introduced by the central bank, according to an official involved in negotiations with Athens.

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