Euro­pean shares rise af­ter US jobs re­port

The Pak Banker - - MARKETS/SPORTS -

Euro­pean shares rose on Fri­day af­ter strong U.S jobs data eased con­cerns about a pos­si­ble re­ces­sion in the world's largest econ­omy, with min­ers boosted by firmer me­tals prices and auto stocks mak­ing their sev­enth day of gains in a row.

The pan-Euro­pean FTSEurofirst 300 in­dex rose 0.7 per­cent to 1,344.62 points, scor­ing its third straight week of gains, while the euro zone's Euro STOXX 50 in­dex climbed 0.8 per­cent.

U.S. em­ploy­ment gains surged in Fe­bru­ary, the clear­est sign yet of labour mar­ket strength that could fur­ther ease fears about the econ­omy and al­low the Fed­eral Re­serve to grad­u­ally raise in­ter­est rates this year.

"Risk mood is on and con­cerns over a re­ces­sion are start­ing to dis­ap­pear," said Con­sult­in­vest fund man­ager En­rico Vac­cari.

Euro­pean stocks have ral­lied af­ter a rocky start to 2016, as oil prices re­cov­ered and fears over a U.S. eco­nomic slow­down abated. Nev­er­the­less, the FTSEurofirst re­mains down around 6.5 per­cent since the start of the year.

Min­ing stocks Glen­core, An­glo Amer­i­can, BHP Bil­li­ton, Antofa­gasta and Rio Tinto all rose by be­tween 5.9 to 11.9 per­cent, helped by a rally in the prices of ma­jor in­dus­trial me­tals. Cop­per was headed for its big­gest weekly ad­vance in about six months, amid op­ti­mism about de­mand and cuts in out­put

Auto stocks were also up, for the sev­enth straight ses­sions, led by Ger­man car­maker Volk­swa­gen which ended up 4.2 per­cent. In­vestors took heart this week from more up­beat com­ments over the Chi­nese mar­ket at the Geneva car show and were lured by low val­u­a­tions af­ter this year's sell­off.

But some fund man­agers cau­tioned against mak­ing blan­ket in­vest­ment bets on the sec­tor, which has been the se­cond worst per­former this year af­ter banks.

"While cer­tain val­u­a­tion met­rics do seem to sug­gest the au­to­mo­tive sec­tor sell­off may be ap­proach­ing an end, the cur­rent stage of the cy­cle would sug­gest selec­tive ex­po­sure," said Tyler Cur­tis of the Global Sec­tor Eq­ui­ties team at BNP Paribas.

Shares in rig com­pa­nies Sead­rill and Transocean jumped 38 per­cent and 20 per­cent re­spec­tively with traders at­tribut­ing the move to short cov­er­ing.

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