European stocks rallied on Friday after US jobs data backed bets that the US Federal Reserve would deliver smaller rate hikes, with hopes of easing COVID-19 curbs in China boosting mining and luxury stocks.
The STOXX 600 closed 1.81 percent higher at 416.98, with basic resources, personal and household goods and automakers leading a broad rally.
Thanks to a largely better-than-expected earnings season and hopes that central banks would slow their pace of monetary policy tightening, the benchmark index marked its fourth straight weekly gain with a 1.51 percent rise.
In London, the internationally oriented FTSE 100 index rallied 2.03 percent on the day to 7,334.84, touching its highest level in seven weeks. Its weekly rise of 4.07 percent was its best since January last year.
Wall Street’s main indices held steady as a slowing pace of US job growth and rising unemployment rate suggested some loosening in labor market conditions, supporting hopes of a shift toward smaller rate hikes from next month.
“We definitely believe that the Fed will continue with its hiking cycle, although not with the jumbo hikes that we have seen during the last meetings,” Rabobank senior market economist Teeuwe Mevissen said.
Furthermore, China is expected to make substantial changes to its COVID-19 policy in coming months and further shorten quarantine requirements for inbound travelers.
Luxury giants, including LVMH Moet Hennessy Louis Vuitton SE, Kering, Pernod Ricard and Hermes International SCA, which have a large exposure to China, climbed 3.7 to 7.1 percent.
Miners rose 5.3 percent to post their best day in almost four months as metal prices jumped on speculation over easing COVID-19 curbs in top metal consumer China.
The Euro STOXX volatility index dropped to an 11-week low, reflecting easing anxiety among investors.
Data so far indicates that the eurozone is heading toward a winter recession.
A survey showed that eurozone business activity contracted last month at the fastest pace since late 2020 as high inflation and fears of an intensifying energy crisis hit demand.
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