Stocks up as US jobs gains raise recovery hopes

Eurostoxx 50: 2,952.90 (+26.36) Frankfurt DAX: 7,492.25 (+115.29) Paris CAC: 4,058.01 (+53.41):EUROPEAN STOCKS gained the most in more than two weeks yesterday, after the US economy added more jobs than forecast last month.

Royal Bank of Scotland rallied after chief executive officer Stephen Hester forecast a return to profit this year.

The Stoxx 600 gained 1.3 per cent to 281.42. The gauge has declined 0.8 per cent this week as commodities tumbled.

“For the announcement to have come in better than expected has given the market a positive snap,” said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.

“This is a comforting piece of data which tends to suggest that the US recovery is on track, albeit at a slower rate than most would wish,” he said.

Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, after a revised 221,000 rise the previous month, the Labor Department said yesterday in Washington.

Employment excluding government jobs jumped the most in five years.

The jobless rate rose to 9 per cent, the first increase since November.

RBS climbed 6.6 per cent to 43.14p, rebounding from Thursday’s 2.9 per cent slide.

ThyssenKrupp jumped 8 per cent to €32.23 on plans to sell or spin off units representing about a quarter of its sales as it seeks to cut debt and focus on engineering.

Deutsche Lufthansa gained 4.4 per cent to €15.31 after UBS upgraded Europe’s second-biggest airline to “buy” from “hold”.

International Consolidated Airlines jumped 3.5 per cent to 254.6p after the company, formed from the merger of British Airways and Iberia, posted a profit in its first quarter of operations, beating predictions, as traffic rose and the deal cut costs.

BP rallied 3.1 per cent to 454.65p after Europe’s second-largest oil company won the right to carry out a $7.8 billion share swap with state-owned Russian oil producer OAO Rosneft.

Pandora, the Danish jewellery chain, rallied 7.6 per cent to 256 kroner, the second biggest gain in the Stoxx 600.

Belgacom lost 5.2 per cent to €25 after the largest telephone company in Belgium lowered its revenue and earnings forecasts. – (Bloomberg)