European Stocks Extend Gains as U.S. Payroll Data Beat Estimatesby and
Nonfarm payrolls rose 255,000 in July; jobless rate 4.9%
LafargeHolcim climbs as quarterly profit beats forecasts
European stocks posted their biggest two-day advance in more than three weeks as U.S. jobs data beat expectations.
The Stoxx Europe 600 Index climbed 1.1 percent to 341.38 at the close of trading, trimming its weekly loss to 0.2 percent. A report from the U.S. Labor Department showed payrolls climbed by 255,000 last month, exceeding all forecasts in a Bloomberg survey, signaling that the world’s biggest economy is strengthening.
Stocks rebounded yesterday after the Bank of England unveiled fresh stimulus measures to help the economy cope with the repercussions of the Brexit vote. Optimism that central banks will do what’s needed to protect economic growth and contain the fallout from the U.K’s decision has sparked a tentative return of bullish sentiment, albeit amid low-volume trading. The number of shares changing hands on the Stoxx 600 today was 29 percent below the 30-day average.
“It’s important that the U.S. holds strong, as that also helped bring optimism back to markets,” said Dirk Thiels, head of investment management at KBC Asset Management in Brussels. “There’s a lot of hope that central banks can counter any downside to growth, especially after the Bank of England shot a pretty big torpedo yesterday. That’s very reassuring after so much talk that monetary stimulus had reached the end of its capacity.”
The U.K.’s FTSE 100 Index climbed 0.8 percent, after yesterday jumping the most since June. The FTSE 250 mid-cap gauge finally recovered its Brexit losses today. Stocks in so-called peripheral markets posted the biggest advances, with Italy’s FTSE MIB Index jumping 2.4 percent, Ireland’s ISEQ Index adding 1.8 percent and Spain’s IBEX 35 Index gaining 1.8 percent.
Among shares moving on corporate news, Evonik Industries AG rose 4.9 percent after the chemical maker reported a smaller-than-projected drop in quarterly earnings. LafargeHolcim Ltd. jumped 5 percent as second-quarter earnings improved more than analysts had expected and the cement producer pledged to sell more assets. Hugo Boss AG added 7.4 percent after the German fashion company posted better-than-expected revenue.
Allianz SE slipped 1.4 percent after the insurer said second-quarter profit fell by almost half, missing analysts’ estimates, amid higher claims arising from natural disasters and charges for the sale of its South Korea unit. Royal Bank of Scotland Group Plc declined 7.2 percent after the British lender posted another loss and said it will probably take even longer than expected to reach profitability targets.
Novo Nordisk A/S tumbled 10 percent as the biggest maker of insulin trimmed its forecasts for annual sales and profit amid intensifying pricing pressure in the U.S.