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European stocks rise on solid US jobs report

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Dow Jones Industrial Average up by 47.35 points 0.36 per cent, the broad-based S&P 500 gained 0.34 per cent, Nasdaq Composite rose 0.22 per cent

London – (AFP) European stocks rose Friday and the euro hit a three-week low versus the dollar after poor Eurozone manufacturing data was upstaged by strong US jobs figures, dealers said.

In afternoon deals, London’s benchmark FTSE 100 index of top companies rose 0.36 per cent to 5,882.85 points, Frankfurt’s DAX 30 firmed 0.65 per cent to 7,383.39 points and in Paris the CAC 40 rose 0.49 per cent to 3,492.65 points.

In foreign exchange activity, the euro slid to $1.2837 — the lowest level since October 11, which compared with $1.2940 late in New York on Thursday.

Gold prices decreased to $1,708.25 an ounce on the London Bullion Market, down from $1,716.25 Thursday.

The US economy generated a net 171,000 jobs last month and revisions put the three-month average at 170,000, though unemployment ticked up to 7.9 per cent, better news than expected for the economy and President Barack Obama as he fights to keep his job in next Tuesday’s vote.

Five minutes into trade the Dow Jones Industrial Average was up 47.35 points 0.36 per cent, the broad-based S&P 500 gained 0.34 per cent, and the Nasdaq Composite rose 0.22 per cent.

“Good news for the US as employment growth surprised on the upside in October, adding to the other evidence of improved growth prospects in the US,” said Rob Wood of Berenberg Bank.

“Along with the Chinese economy showing signs of strengthening, this gives us hope that global growth has bottomed out,” he said.

The eurozone manufacturing sector meanwhile was stuck in the doldrums for a fifteenth consecutive month in October, getting the fourth quarter off to a weak start and offering no hope for change in the near future, a key survey showed Friday.

The Purchasing Managers Index (PMI) compiled by the Markit research firm put the manufacturing sector on 45.4 points, better than the initial figure of 45.3 given last week but still down sharply from 46.1 in September. Anything above 50 points to growth while anything below is a contraction.

Markit said the downturn “not only deepened but also widened” in the latest survey, noting a further deterioration in new orders while new export orders fell for the 16th month in a row in October.

Job losses mounted for a ninth successive month and at the fastest rate since July, it added.

The rate of contraction accelerated in Germany, Europe’s biggest economy, which was on a 2-month low of 46 points; and in Italy, Spain, Austria and Greece, while France was slowing faster than its peers.

“The weaker PMIs merely confirm the view that economic conditions in Europe show no signs of picking up with the euro slipping back as a result,” said Michael Hewson, analyst at trading group CMC Markets.

European equities had risen on Thursday following a barrage of positive earnings reports and buoyant US data, while investors shrugged off the latest twist in Greece’s saga to unlock bailout funding.

On Thursday, the US Conference Board index of consumer confidence for October rose to a better-than-forecast 72.2 in October, from a revised 68.4 in September, pointing to a pick-up in the crucial manufacturing sector.

Also Thursday, the Labour Department said weekly jobless claims continued their decline, falling a modest 9,000 to 363,000 last week — below the four-week moving trend of 367,250.

Adding to the sense of optimism, payrolls company ADP’s private sector hiring report was better than expected, though at 162,000 jobs in September was still down by 14 per cent from August.

Asian stock markets on Friday won a boost from the upbeat global economic data and gains in New York share prices.

Hong Kong climbed 1.33 per cent, Seoul 1.07 per cent, Shanghai closed up 0.60 per cent, while Tokyo jumped 1.17 per cent on the back of the weaker yen.


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