Sun, Aug 07, 2016 - Page 14 News List

European stocks advance on US jobs

Bloomberg

European stocks posted their biggest two-day advance in more than three weeks as US jobs data beat expectations.

The STOXX Europe 600 Index climbed 1.1 percent to 341.38 at the close of trading on Friday, trimming its weekly loss to 0.2 percent. A report from the US Department of Labor showed payrolls climbed by 255,000 last month, exceeding all forecasts in a Bloomberg survey, signaling that the world’s biggest economy is strengthening.

Stocks rebounded on Thursday after the Bank of England unveiled fresh stimulus measures to help the economy cope with the repercussions of the Brexit vote.

Optimism that central banks will do what is needed to protect economic growth and contain the fallout from the UK’s decision has sparked a tentative return of bullish sentiment, albeit amid low-volume trading.

The number of shares changing hands on the STOXX 600 yesterday was 29 percent below the 30-day average.

“It’s important that the US holds strong, as that also helped bring optimism back to markets,” said Dirk Thiels, head of investment management at KBC Asset Management in Brussels. “There’s a lot of hope that central banks can counter any downside to growth, especially after the Bank of England shot a pretty big torpedo yesterday. That’s very reassuring after so much talk that monetary stimulus had reached the end of its capacity.”

The UK’s FTSE 100 Index climbed 0.8 percent, after jumping the most since June on Thursday. The FTSE 250 mid-cap gauge finally recovered its Brexit losses on Friday.

Stocks in so-called peripheral markets posted the biggest advances, with Italy’s FTSE MIB Index jumping 2.4 percent, Ireland’s ISEQ Index adding 1.8 percent and Spain’s IBEX 35 Index gaining 1.8 percent.

Among shares moving on corporate news, Evonik Industries AG rose 4.9 percent after the chemical manufacturer reported a smaller-than-projected drop in quarterly earnings.

LafargeHolcim Ltd jumped 5 percent as second-quarter earnings improved more than analysts expected and the cement producer pledged to sell more assets. Hugo Boss AG added 7.4 percent after the German fashion company posted better-than-expected revenue.

Allianz SE slipped 1.4 percent after the insurer said that second-quarter profit fell by almost half, missing analysts’ estimates, amid higher claims arising from natural disasters and charges for the sale of its South Korean unit.

Royal Bank of Scotland Group PLC declined 7.2 percent after the British lender posted another loss and said it would probably take even longer than expected to reach profitability targets.

Novo Nordisk A/S tumbled 10 percent as the biggest maker of insulin trimmed its forecasts for annual sales and profit amid intensifying pricing pressure in the US.

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