Equity surge after US jobs report sends European shares up

Markets ticked higher on Friday after data showed US employment growth in August was slower than expected which could rule out an interest rate increase this month.

US payrolls climbed by 151,000 in August, following an upwardly revised gain of 275,000 in July. The jobless rate remained at 4.9 per cent.

The surge in equities after the US report sent European shares towards their highest levels since April.

DUBLIN

On the Dublin market, the Iseq closed almost 1.6 per cent higher, at 6,287.99. The index was lifted by an overall bounce in European equities.

After a slow start, Ryanair picked up momentum throughout the day to end 3.3 per cent higher at €12.69. The airline reported traffic statistics that showed passenger numbers grew 11 per cent in August to 11.5 million. Its load factor, a measure of how full its flights are, also rose, gaining 1 per cent compared to 2015 figures.

Irish Continental Group also climbed, adding 2.8 per cent to close at €4.86.

Building stocks showed some strength and ended up 1.3 per cent at €30.495. Kingspan gained 2.8 per cent during the session to close at €25.

Bank of Ireland was a little lacklustre, traders said, but managed to end the session at 20.6 cent, almost 1 per cent higher.

LONDON

British equities jumped the most since June in a rally that lifted almost all FTSE 100 Index shares in the wake of the US jobs report.

The benchmark gauge of large UK companies climbed 2.2 per cent, with 90 of its shares up. That took its weekly advance to 0.8 per cent, snapping two weeks of declines.

Hikma Pharmaceuticals advanced 5.2 per cent, rebounding from its lowest price since April and leading gains among drugmakers.

Consumer companies also climbed, with Imperial Brands and Unilever up more than 3.8 per cent, while energy producers jumped from a one-month low. The FTSE 250 Index of mid-cap shares added 0.9 per cent.

EUROPE

The Stoxx Europe 600 Index rallied 2 per cent at 4.41pm in London, the most since June 29th, with the advance gathering pace after the US jobs report.

Consumer-related companies and utilities led the gains in Europe, with Germany’s RWE and Unilever up more than 4 per cent. Miners bounced with commodities, while energy producers headed for their largest rallies in two months.

The rebound in commodity firms and utilities pushed France’s CAC 40 Index up more than 2.2 per cent, the most among major markets in the region.

Drugmakers also rebounded after falling to their lowest prices since June, and banks were set to post the biggest surge among industry groups this week, up 6.1 per cent in the period – the most since July.

In Germany, the DAX Index added 1.4 per cent, while the Swiss Market Index gained 1.9 per cent.

NEW YORK

Wall Street was higher on Friday on the muted jobs figures that dampened prospects for a rate rise.

Rate hike probabilities for September and December had risen after last Friday's remarks by Fed chairwoman Janet Yellen that the case for raising rates had strengthened in recent months. The Fed next meets on September 20th-21st.

At 10.57am ET (2.57pm GMT), the Dow Jones industrial average was up 99.71 points, or 0.54 per cent, at 18,519.01. The S&P 500 was up 11.1 points, or 0.51 percent, at 2,181.96 and the Nasdaq Composite was up 30.01 points, or 0.57 per cent, at 5,257.21.

All 10 major S&P sectors were higher, with the consumer staples index’s 0.77 per cent rise leading the advancers.

Oil prices rose about 2.3 per cent after the jobs report weighed on the dollar.

Advancing issues outnumbered decliners on the NYSE by 2,333 to 508. On the Nasdaq, 1,888 issues rose and 732 fell.

The S&P 500 index showed 36 new 52-week highs and two new lows, while the Nasdaq recorded 117 new highs and 11 new lows.

– Additional reporting: Reuters, Bloomberg