Oil stocks on Friday lifted European shares, with London’s blue-chip index hitting nine-month highs, while disappointing jobs growth in the US strengthened hopes for fiscal stimulus.
London’s FTSE 100 rose 0.92 percent to 6,550.23 as crude prices gained after a compromise between OPEC+ members to continue to increase output slightly from January but continue the bulk of existing supply curbs.
The index rose 2.87 percent from a week earlier.
Europe’s oil and gas index on Friday jumped 3.1 percent.
In the US, data showed the economy added the fewest number of workers in six months last month, but markets quickly recovered as the report raised hopes of the US Congress pushing through a US$908 billion aid package.
“Vaccines, the restart of talks about stimulus and the new [US] administration, and a less confrontational international background, are still going to be the themes that drive the market,” said Marvin Loh, senior global macro strategist at State Street Global Markets in Boston.
The pan-European STOXX 600 index rose 0.59 percent, which helped it edge up 0.21 percent for the week — its fifth straight week in the black.
Disappointing economic data and uncertainty regarding the UK’s departure from the EU had weighed on it this week. Progress on a trade deal still remained uncertain.
EU officials said that a deal could finally be clinched this weekend, but London insisted that negotiations were still “very difficult.”
Germany’s DAX climbed 0.35 percent to 13,298.96, but ended 0.28 percent lower on the week, having underperformed its peers for most of the week.
The index has risen about 60 percent from its March lows compared with a nearly 46 percent rise for the STOXX 600 over the same period.
Data on Friday showed that German industrial orders rose more than expected on the month in October, raising hopes the manufacturing sector in Europe’s biggest economy started the fourth quarter on a solid footing.
Basic material stocks rose 1.4 percent and were the biggest gainers this week, up 6.8 percent in its best weekly performance in six months, as copper and iron ore prices soared.
Sweden’s Investment AB Latour dropped 12.7 percent and was the worst performer in the STOXX 600 after its majority shareholder trimmed its stake in the company.
All eyes are likely to be on the European Central Bank meeting on Thursday next week when it is expected to keep its policy rate on hold, but increase bond buying.
Additional reporting by staff writer
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