European shares advance as solid US jobs report offers hope
Markets report: Aryzta closes 7.8% higher as investors cheer sale of most of Picard stake
European shares closed higher on Friday, helped by a solid US jobs report for September.
European shares closed higher yesterday, helped by a solid US jobs report for September which offered some relief for followers of the world’s largest economy after a raft of weak economic data during the week – but which wasn’t enough to kill off speculation about interest rate cuts.
The US labour department’s report showed nonfarm payrolls increased by 136,000 last month and the unemployment rate dropped to a 50-year low, but manufacturing payrolls declined for the first time in six months.
“It’s sort of a Goldilocks report: it’s not strong enough to move the Federal Reserve away from cutting rates at the end of October, but it’s not weak enough to make you concerned about the labour market or the consumer,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management in New York.
Bets of interest rate cuts by the Fed soared this week after a dramatic contraction in US factory activity, cooling private-sector hiring and a fall in service sector activity evidenced the fallout from a prolonged US-China trade war.
The pan-European Stoxx 600 index rose 0.7 per cent to 380.22.
The Iseq index in Dublin advanced 0.5 per cent to 6,142.05. Aryzta closed 7.8 per cent higher at 70c, as investors cheered the Swiss-Irish baked goods group’s agreed sale of most of its stake in French frozen foods group for €156 million, which will help the company to continue to chip away at its debt pile.
Malin added 5 per cent to €4.20 as the group’s former main shareholder, troubled UK fund manager Woodford Investment Management, had sold its remaining 3.5 per cent in the Irish life-sciences company. Woodford had sold most of its 28 per cent holding last week.
Brexit-sensitive stocks were also on the rise, after papers opened in a Scottish court showed that UK prime minister Boris Johnson has promised to obey the law and send a letter to the EU requesting a delay to his country’s exit from the bloc if he can’t get a withdrawal deal by October 19th.
C&C advanced 3.1 per cent to €4.18, Applegreen moved 2.9 per cent higher to €5.62 and Kingspan added 2.3 per cent to €45.72.
Bucking the trend, Abbey lost 6.7 per cent to €12.60, even though the homebuilder, which has a very small number of tradable shares, said that it was on track for a “satisfactory” year.
The FTSE 100 gained 1.1 per cent. BP shares ended the day higher despite its chief executive, the boss brought in to turn around the oil giant following the Deepwater Horizon disaster, announcing his retirement after 40 years in the industry.
Bob Dudley (64) said he would step down as chief executive following the company’s annual results in February and formally quit the following month. Shares in BP closed up 2 per cent higher at £4.946.
BMW was in full reverse, falling 1.6 per cent, after an Australian regulator called for 20,000 cars with faulty Takata airbags to be kept off the roads, many of which include BMW cars.
Shares of chipmakers AMS, Infineon Technologies, STMicro and Dialog Semiconductor jumped between 2 per cent and 4.3 per cent on the back of reports that Apple would increase its iPhone 11 production.
The unemployment rate in the US fell to a 50-year low in September, easing worries over a potential recession after weak data earlier this week showed a slowdown in US manufacturing and services.
“We’ve had such a string of bad news, that anything that shows the economy is doing better than perhaps people have been talking about is well received,” said market strategist JJ Kinahan.
The Dow rose 372.68 points, or 1.42 per cent, to 26,573.72, the S&P 500 gained 41.28 points, or 1.42 per cent, to 2,951.91 and the Nasdaq added 110.21 points, or 1.4 per cent, to 7,982.47. – Additional reporting, Reuters.