Europe: Shares ends off highs as US jobs growth slows; DAX shines

[LONDON] European shares rose on Friday as investors maintained strong flows into the region but top regional benchmarks came off earlier highs after a disappointing US jobs growth.

The pan-European Stoxx 600 ended up 0.2 per cent. Germany's DAX rose 1.25 per cent and UK's FTSE added 0.05 per cent, having both hit fresh record highs earlier in the day.

US non-farm payrolls showed only a modest rise which could raise concerns about the health of the economy after growth slowed in the first quarter.

"This is not what financial markets were expecting," said Aberdeen Asset Management Senior Economist Paul Diggle.

Supporting the DAX were gains among carmakers after better than expected US car sales data, as well as in Linde after boards approved a US$73 billion merger deal with US peer Praxair to create an industrial gases leader.

Linde shares rose 2 per cent but remained at a discount to the price implied by the merger terms.

"Based on recent M&A in the chemical sector we believe this discount is appropriate reflecting the value leakage from disposals asked for by regulators and the time to closing," said UBS analysts led by Geoff Haire in a note.

Dealmaking has been a powerful engine driving shares higher in 2017. According to Reuters data, merger and acquisition volumes have reached $361 billion year-to-date, up 37 per cent.

Meanwhile, US President Donald Trump delivered a blow to the renewable energy agenda, withdrawing from the landmark 2015 global agreement to fight climate change.

Shares in Danish wind energy provider Vestas fell 1.8 per cent, while Europe's energy stock index, which includes oil and gas as well as renewable companies, was the worst-performing, down 1.3 per cent.

French pharmaceuticals firm Ipsen rose 3.7 per cent but pared some gains after its finance chief doused investors'expectations of a potential 1.67 billion euro share buyback.

Cable maker Prysmian rose 3.8 per cent after it secured a spot on Goldman Sachs' "conviction" list of stocks.

B&M European Value Retail was among top fallers, down 2.5 per cent after private equity firms CD&R and SSA sold a 12.5 per cent stake in the firm.

European equities saw a 10th consecutive week of inflows, according to Bank of America Merrill Lynch which reaffirmed the region's attractiveness to international investors.

REUTERS