European stocks on Friday ended a volatile session lower, as investors digested data showing slowing jobs growth in the US, but they still marked their best week in two months as fears of soaring inflation were tempered.
A US Department of Labor report showed nonfarm payrolls increased by 194,000 jobs last month, compared with an expectation of 500,000.
Although the headline number was a huge miss, analysts said excluding the seasonally adjusted factors, the number was not too disappointing.
The pan-European STOXX 600 index, which had fallen as much as 0.5 percent, only briefly reversed the earlier losses after the data, and closed down 0.28 percent at 457.29. It rose 0.97 percent on the week.
“Payrolls data came in weaker than expected, but the overall trend of an improving labor market remains intact,” Wells Fargo Investment Institute Inc senior global market strategist Sameer Samana said.
While strong numbers could cement the case for the US Federal Reserve’s withdrawal of its support for the economy, many analysts expect that even a second straight weak employment report might not be enough to hold the central bank back from announcing a slowdown of its bond purchases later this year.
“It doesn’t look like today’s figure comes anywhere close to the kind of scary figure that might provoke [the Fed] into swerving course at the last minute,” said Chris Beauchamp, chief market analyst at online trader IG.
Oil and auto stocks led gains in Europe, but this was outweighed by tech stocks falling 1.4 percent as rising bond yields dimmed the high-growth sector’s appeal.
Meanwhile, surging oil stocks helped the UK’s blue-chip index outperform its European peers as crude prices rallied.
The commodity-heavy FTSE 100 rose 0.25 percent to 7,095.55, up 0.97 percent from a week earlier, with shares in oil majors BP PLC and Royal Dutch Shell PLC jumping more than 2 percent as an ongoing global energy crunch drove US crude futures to US$80 a barrel for the first time since 2014.
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