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Europe: Shares end higher after strong US jobs data
[MILAN] European stock markets ended higher on Friday after stronger than expected US jobs data boosted the dollar, lifting export-oriented stocks like autos, although Cartier brand-owner Richemont plunged after warning of tough times ahead.
The pan-European FTSEurofirst 300 index ended up 0.27 per cent and the euro zone's blue-chip Euro STOXX 50 index gained 0.6 per cent, while Germany's export-heavy DAX outperformed to gain 0.92 per cent.
A robust job report for October pointed to a stronger labour market and boosted prospects the Federal Reserve will raise interest rates next month, sending Wall Street shares lower in the first hours of trading. "The figures clearly project us to a US rate increase in December," said Andrea Cuturi, chief investment officer at asset manager Anthilia Capital. "The start of a tightening cycle in the US means that Wall Street could start to underperform European equities as monetary policies diverge." This week Federal Reserve Chair Janet Yellen said the United States was ready for higher interest rates if upcoming economic data justified them, while in Europe the ECB made a fresh pledge to ramp up stimulus if needed.
Shares in Swiss agriculture company Syngenta rose 4.1 per cent after media reports of a possible deal with DuPont, while disgruntled shareholders called for the company to abandon efforts to sell parts of its business and instead conduct a strategic review.
Cement maker CRH rose 3.6 per cent after UBS upgraded the construction sector to "overweight" and named the Irish company as its preferred pick.
Construction and materials, banks and autos were the top sectoral gainers and were all up more than 1.8 per cent.
Richemont fell 5.7 per cent after warning of a challenging second half after first-half net profits grew less than expected, as strong demand for high-end jewellery could not make up for weaker luxury watch sales in Hong Kong.
Sanofi fell 6.8 per cent after the drugmaker said investment in products to compensate for declining diabetes sales and cost cuts would prevent any meaningful profit growth in the next two years.
According to data from Thomson Reuters StarMine, 52 per cent of companies on the European STOXX 600 index have beaten or met market forecasts with their third-quarter results so far, while earnings guidance has been cut for the fourth quarter. "Earnings have been very mixed so far. The European markets are looking quite sluggish at the moment, and I would be inclined to sell into any reasonable rally," said Berkeley Futures' associate director Richard Griffiths.