European stocks rise before US jobs data

Written By Unknown on Jumat, 03 Mei 2013 | 19.50

EUROPEAN stock markets and the euro have risen ahead of key US jobs data, ending the week positively after heavy losses in recent days.

London's FTSE 100 index of top companies on Friday gained 0.23 per cent to stand at 6,476.12 points approaching midday in the British capital.

Frankfurt's DAX 30 climbed 0.33 per cent to 7,987.30 points and in Paris the CAC 40 won 0.16 per cent to 3,864.90 points.

In foreign exchange trade, the European single currency advanced to $US1.3129 from $US1.3063 late in New York on Thursday.

On the London Bullion Market, gold rose to $US1,476.85 an ounce from $US1,469.25.

"Attention turns to this afternoon's non-farm payrolls data as traders seek insight to the state of the US employment market following last month's huge miss," said Matt Basi, head of UK sales trading at CMC Markets.

Ahead of the data, traders digested an announcement by the European Union that recession in the crisis-hit eurozone would continue unabated for the rest of the year with unemployment remaining at record levels, though it added that signs of recovery could emerge in 2014.

Economic output in the 17-nation area - home to 340 million people and a global rival to the United States, Japan and emerging giants - would shrink by 0.4 per cent this year, the European Commission said. That was worse than the 0.3-per cent forecast in February and followed a 0.6-per cent contraction last year.

Record unemployment in the single currency area would endure, the Commission's spring forecasts showed, with strong divergence between richer eurozone states to the north and members to the south mired in deep recession.

The euro had tumbled against the US dollar on Thursday after the ECB cut key rates to a record low in its latest effort to help break the eurozone from recession.

The European Central Bank trimmed its key "refi" refinancing rate by a quarter of a percentage point to a new record low of 0.50 per cent.

In company activity on Friday, shares in Royal Bank of Scotland slumped 5.63 per cent to 290 pence after the state-rescued lender's operating profit came in below expectations, traders said.

RBS chairman Philip Hampton meanwhile said that the Edinburgh-based bank hoped to begin offloading the government's 81 per cent stake from the middle of next year or possibly earlier.

Among the biggest gainers were miners amid hopes of a positive US employment report, traders said. Rio Tinto won 2.98 per cent to 2,992 pence and BHP Billiton jumped 2.75 per cent to 1,831 pence.

Asian stock markets mostly closed higher on Friday, aided by the ECB interest-rate cut and a positive US jobless claims report.

On Wall Street, the S&P 500 reached a new all-time high on Thursday.

A better-than-expected US Labor Department report showed new claims for unemployment benefits had fallen to a five-year low. The claims - an indicator of the pace of layoffs - fell by 18,000 to 324,000, the lowest level since mid-January 2008.

Markets were hoping for more positive news on the US jobs front when non-farm payrolls data is released later on Friday.


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