European stocks recuperate on ECB, US jobs report

SAFE HAVEN::As global funds leave emerging markets, investors could look to Europe as a good place to park their funds, an analyst in London said


Sun, Feb 09, 2014 - Page 15

European stocks rebounded this week from their worst start to a year since 2010, as European Central Bank (ECB) President Mario Draghi pledged action if money-market turbulence resumes and investors weighed a US jobs report.

Ryanair Holdings PLC added 14 percent after saying more people have booked flights for the summer than at this stage last year, while Sky Deutschland AG rose 14 percent after reporting earnings that beat analysts’ expectations.

Dassault Systemes slumped 8.6 percent after predicting earnings this year would be lower than analysts’ projections.

The STOXX 600 rose 0.8 percent to 325.09 this week. The benchmark gauge has lost 3.3 percent from a six-year high on Jan. 22 amid signs of slowing economic growth in China, reduced stimulus from the US Federal Reserve and as the Argentinian government’s decision to allow the peso to devalue triggered a rout in emerging-market currencies.

“People are still optimistic,” said Craig Erlam, a London-based market analyst at Alpari UK Ltd, a provider of trading services in equities, currencies and commodities.

“Europe is unique right now. Once money starts to pour out of emerging markets, investors will be looking at where to get the best yield, especially in an environment that looks relatively safe,” Erlam said.

US payrolls increased by 113,000 last month, following a revised 75,000 gain in December, US Department of Labor figures showed. The median forecast of economists in a Bloomberg survey called for a 180,000 advance. The jobless rate fell to 6.6 percent, the lowest level since October 2008.

The STOXX 600 jumped 1.5 percent on Thursday, the most since Dec. 19, after the ECB kept its key interest rate at 0.25 percent and Draghi reiterated that the bank would take action if the outlook for inflation worsens or money-market turbulence resumes.

National benchmark indices increased in all 18 Western European markets except Germany this week.

The UK’s FTSE 100 added 0.9 percent, France’s CAC 40 rose 1.5 percent, while Germany’s DAX lost 0.1 percent.