European Stocks Close Higher As U.S. Jobs Data Helps Ease Rate Concerns

(RTTNews) - After recovering from a weak start, European stocks suffered a setback around noon on Friday, but recovered well to close on a fairly firm note after data showing a smaller than expected growth in U.S. non-farm payroll employment raised hopes the Federal Reserve will soon end its interest-rate hiking cycle.

The Labor Department data said U.S. non-farm payroll employment climbed by 187,000 jobs in July after rising by a downwardly revised by 185,000 jobs in June.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 209,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate edged down to 3.5 percent in July from 3.6 percent in June. Economists had expected the unemployment rate to remain unchanged.

Investors also digested the latest batch of economic data from the region, and corporate earnings updates.

The pan European Stoxx 600 gained 0.29%. The U.K.'s FTSE 100 climbed 0.47%, Germany's DAX ended 0.37% up, and France's CAC 40 surged 0.75%. Switzerland's SMI edged up 0.1%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Iceland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye closed higher.

Denmark and Russia ended weak, while Czech Republic and Ireland closed flat.

In the UK market, Rolls-Royce Holdings climbed nearly 7.5%. Mondi gained 5.5% and St. James's Place advanced 4.3%.

Flutter Entertainment, Smurfit Kappa Group, Smith (DS), Melrose Industries, Burberry Group, Shell, M&G, IAG, BP and Vodafone Group gained 1.7 to 3.6%.

WPP dropped 3.45% after downgrading its full-year growth forecast, while Spirax-Sarco Engineering, Compass Group and Reckitt Benckiser lost 1 to 1.2%.

In the German market, Puma rallied more than 3%. Daimler Truck Holding, Siemens, Siemens Healthineers and MTU Aero Engines gained 1.5 to 2.1%, while Allianz, Munich RE, BMW and Adidas advanced 1 to 1.2%.

Commerzbank lost 2.7% despite backing its FY23 profit view and lifting net interest income forecast. Sartorius, Qiagen, Infineon, Zalando, Merck, Vonovia and Fresenius lost 1.2 to 2.7%.

In Paris, Credit Agricole surged more than 6%. The lender reported better-than-expected earnings for the second quarter, driven by strong insurance and consumer finance performances.

TotalEnergies, Societe Generale and AXA gained 2 to 2.8%. BNP Paribas gained about 1.5% on share buy-back news. Sanofi and Unibail Rodamco ended higher by about 1.8% and 1.4%, respectively. Safran, Vinci and Kering also posted notable gains.

STMicroElectronics ended 2.6% down. Capgemini, Danone, Carrefour and Publicis Groupe also closed with, though with less pronounced losses.

In European economic news, German factory orders unexpectedly rebounded in June driven by foreign demand, while France's industrial production declined 0.9% in June, following a revised 1.1% growth in May, separate reports showed.

France's manufacturing output decreased 1%, reversing May's revised 1.2% gain.

France's payroll employment increased at a slower rate in the second quarter, flash data from the statistical office INSEE showed Friday. Overall payroll employment increased 0.1%, or 19,700, in the second quarter. This was slower than the 0.4%, or 86,800 jobs, created in the first quarter.

UK construction activity returned to growth territory at the start of the third quarter, driven by faster gains in commercial building and civil engineering activity, survey results from S&P Global showed on Friday.

The Chartered Institute of Procurement & Supply Construction Purchasing Managers' Index, or PMI, rose to 51.7 in July from 48.9 in June. The score was expected to fall to 48.0.

UK car registrations continued to increase in July despite the challenging economic conditions as supply chain challenges eased, the Society of Motor Manufacturers and Traders, or SMMT, said.

Car sales advanced 28.3% in July with new vehicle registrations at 143,921. As a result, the market enjoyed non-stop growth for a full year, the SMMT said.

Moreover, this was the best July performance since 2020. However, the lobby said the overall year-to-date sales remained behind pre-pandemic levels.