Forexpros – European stocks closed explosively higher Friday, as strong U,S. employment numbers combined with a raft of solid earnings sparking the global equity rally.
At the close of European trade, the EURO STOXX 50 jumped 4.83%, France’s CAC 40 rocketed 4.38%, while Germany’s DAX 30 exploded 3.94%.
Sparking the rally, U.S. non-farm payrolls rose more-than-expected last month, official data showed on Friday.
In a report, the U.S. Department of Labor said non-farm payrolls rose to a seasonally adjusted 163K, from 64K in the preceding month whose figure was revised down from 80K.
Analysts had expected U.S. non-farm payrolls to rise 100K last month.
Further boosting equity sentiment, the Institute of Supply Management non-manufacturing purchasing managers’ index rose more-than-expected in the last quarter, official data showed on Friday.
In a report, Institute for Supply Management said that ISM Non-Manufacturing PMI rose to a seasonally adjusted annual rate of 52.6, from 52.1 in the preceding quarter.
Analysts had expected ISM Non-Manufacturing PMI to rise 52.0 in the last quarter.
Stocks rebounded from Thursday’s rout when the European Central Bank President Mario Draghi said the bank may undertake bond purchases in order to bring down the “exceptionally high” borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
Financial stocks were broadly higher as shares in France’s Societe Generale and BNP Paribas surged 3.57% and 2.82%, while German lenders Deutsche Bank and Commerzbank rallied 2.46% and 1.18% respectively.
Peripheral lenders also added to gains, with Italian Unicredit and Intesa Sanpaolo advancing 2.95% and 3.41%, while Spain’s Banco Santander and BBVA climbed 0.65% and 0.79% respectively.
Meanwhile, Siemens saw shares jump 4.38% on reports the German industrial conglomerate plans to buy back up to EUR3 billion in shares by the end of the year, as it tries to make best use of its capital structure.
In London, FTSE 100 advanced 2.21%, boosted by strong gains in financial stocks.
Shares in Barclays surged 2.05% and the Royal Bank of Scotland rallied 2.03%, while HSBC Holdings and Lloyds Banking climbed 0.80% and 0.58% respectively.
Insurance company Aviva was also among the session’s top gainers, with shares advancing 2.31%, after Aviva Investors announced that it reached an agreement with Alliance Trust to transfer its GBP1.2 billion range of sustainable and responsible investment funds.
The deal, which is expected to be completed by the end of this month, is part of Aviva’s broader restructuring plan.
Also on the upside, mining giants BHP Billiton and Rio Tinto rose 0.96% and 0.66%, while copper producers Xstrata and Kazakhmys rallied 1.48% and 1.62% respectively.
In the U.S., equity markets followed sharply higher with the Dow up 1.87%, the broad based S&P 500 higher by 2.04% and the tech heavy Nasdaq advancing 2.16% in midsession trade.
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