Stocks rally as US jobs data surpasses expectations
Iseq closes the week higher with Bank of Ireland, Smurfit Kappa, Dalata all gaining
A Bayerische Motoren Werke (BMW) plant. Germany’s Dax index rose 2.2 per cent with BMW, Daimler and Volkswagen gaining 3.6 to 4.3 per cent. Photograph: Dario Pignatelli/Bloomberg
Global stocks jumped on Friday and US treasury yields edged up from this week’s record lows after data showed that US jobs growth accelerated rapidly in June, surpassing even the most optimistic of forecasts.
European shares extended gains, with Germany’s Dax stock index rising more than 2 per cent to lead the region’s bourses. Europe’s FTSEuroFirst 300 index of top shares was up 1.15 per cent.
Drinks group C&C, which on Thursday reported strong first quarter growth, was down 1.6 per cent to €3.51.
Bank of Ireland followed other European banks higher, gaining 4.8 per cent to close at 17 cent.
Other movers included packaging group Smurfit Kappa, which rose 2 per cent to €19.78, betting giant Paddy Power Betfair, up 1.3 per cent to 95.91, and hotel group Dalata, which jumped 3.9 per cent to €3.30.
The Brexit result has sent sterling to a 31-year low against the dollar, yet that has benefited some companies, as a weaker pound can help exporters while firms get an accounting boost from revenues earned in US dollars.
Concerns about the impact of the referendum result hit property and housebuilding stocks earlier this week, with leading fund managers cutting the value of UK property funds.
However, housebuilding stocks recovered on Friday, with analysts at UBS saying the recent drop in the sector could mark an attractive entry point for investors. Housebuilder Taylor Wimpey rose 7.9 per cent while its rival Persimmon advanced 5.6 per cent.
The pan-European Stoxx Europe 600 rose 1.6 per cent but still ended the week with a loss of 1.5 per cent due to persistent worries over the economic and political fallout of Britain’s vote to leave the EU.
Milan’s blue chip index outperformed the region to gain 4.1 per cent with banks Intesa Sanpaolo Banco Popolare and UniCredit posting gains of between 8.7 and 18.4 per cent.
Capital weakness and a mountain of bad debt have put Italian banks at the centre of investors’ immediate concerns but traders said there was some optimism that a solution to help them cut soured loans could be reached.
Germany’s Dax index rose 2.2 per cent with BMW, Daimler and Volkswagen gaining 3.6 to 4.3 per cent.
Shares in Danish telecoms group TDC jumped more than 9 per cent after it said it had rejected a potential takeover approach believed to be from private equity firm Apollo Global Management.
Financial stocks soared following the jobs report. JPMorgan, Wells Fargo and Bank of America rose about 2 per cent and were the top influences on the S&P 500. Goldman Sachs’s 2.2 per cent rise provided the biggest boost to the Dow.
The Dow was up 221.96 points, or 1.24 per cent, at 18,117.84 in early trading. The S&P 500 jumped 28 points, or 1.33 per cent, at 2,125.9 and the Nasdaq was up 71.89 points, or 1.47 per cent, at 4,948.70.
Gun-makers Smith & Wesson and Sturm Ruger rose about 3 per cent on expectations of higher gun sales due to fears of potential gun control policies following the killing of five Dallas police officers.