Surprisingly strong US employment figures breathed life back into a jaded recovery story on Friday, sending European shares higher with German software firm SAP leading a tech charge.
SAP rallied 8 percent to 114.3 euros after US rival Siebel said it would meet quarterly profit forecasts, though revenues would be at the lower end of expectations.
Broker upgrades lifted three of Europe's leading technology firms, with handset giant Nokia of Finland up 5 percent at 14.5 euros, while Dutch chip equipment maker ASML jumped 10 percent to 12.8 euros. Philips Electronics advanced 4 percent to 21.3 euros.
Insurers were strong, led higher by Dutch Aegon after UBS bank raised its rating on the stock, along with that of Italy's Generali, which also climbed.
Bourses extended their advance in the early afternoon on news US employers added 57,000 new jobs last month for the first time in eight months, when a 30,000 job loss was expected.
The US unemployment rate held steady at 6.1 percent.
The news reassured investors that economic recovery is finally creating new jobs so that consumers, which represent two-thirds of US economic activity, are able to keep spending.
"We need to see more sustained gains and larger gains to believe the recovery has legs, but I take this data as good news but want to see it built upon," said Matthew Wickens, global economist at ABN AMRO bank. "I think the US corporate sector can start to hire and spend again, and this is the first tentative sign of a turnaround in the labor market."
The numbers triggered sharp gains in recruitment firm shares, with Swiss Adecco, the top jobs services provider in the US, up 8 percent at 73.7 Swiss francs. Dutch Vedior gained 6 percent to 11.2 euros.
The data sent the dollar higher, easing concerns about the greenback's recent weakness against the euro, and helping export sectors like autos and chemicals to push higher.
There was some good economic news from Europe too, where the services sector rose last month at its fastest pace since April last year in the euro zone, and April 2000 in Britain.
By 1532 Greenwich time, the FTSE Eurotop 300 index was up 2.4 percent at 900 points, with advancing issues eclipsing decliners by more than 10 to one in strong volume.
Since hitting an eight-and-a-half month high a month ago, the Eurotop 300 retreated 5.4 percent by Tuesday as a rally from a six-year low in March went into reverse due to doubts over US economic recovery, a wobbly dollar and oil price spike.
For the week, the benchmark is up two percent as the final quarter of the year kicks off. It is up 5 percent for the year.
The market was ready for some upside after its recent correction, and the jobs data on Friday provided just the excuse, said Florian van Laar of Eureffect Asset Management in Amsterdam.
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