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European Shares Propped Up by Solid US Data

Friday, 1 Feb 2013 | 12:22 PM ET

European shares inched up on Friday, as investors took advantage of the past two sessions' losses to snap up equities more cheaply, reassured by a run of solid data from China, Europe and the United States.

An above-forecast reading on the U.S. manufacturing sector from the Institute for Supply Management (ISM), coupled with upward revisions for previous months' non-farm payrolls offered proof of recovery in the world's biggest economy.

That helped equities build on earlier gains after purchasing managers indexes pointed to stabilisation in the euro zone and a mild recovery in China.

The pan-European FTSEurofirst 300 Index provisionally closed 0.3 percent higher at 1,167.62 points, clawing back some of the retreat suffered in the previous two sessions and edging towards a 2-year peak of 1,178.55 set earlier in the week.

"Given the trauma that equities have been through in the last few months, people want things to be positive. There are hurdles ahead but people are just willing the markets to do really well," said Neil Marsh, strategist at Newedge.

"There is a gradual trend upwards and I don't see that stopping at the moment."

  Name Price   Change %Change Volume
FTSE
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DAX
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CAC 40
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IBEX 35
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The FTSEurofirst 300 Index provisionally closed 0.3 percent higher at 1,167.62 points as U.S. jobs data released showed 157,00 jobs were to the economy last month, against a forecast of 160,000. The unemployment rate showed a slight uptick to 7.9 percent for January against 7.8 percent in December.

Manufacturing data released for the euro zone showing a slight uptick also boosted sentiment on Friday. The PMI figure for January was 47.9 which was better than forecasts and beat December's 46.1 figure.

However, Spain's Ibex 35 closed 2.6 percent down as the country's banks came under pressure.

Spanish banks BBVA, Caixabank and Banco Popular Espanol reported full-year earnings, all showing a dip in profits. Shares were lower, coinciding with a lifting of the short-selling ban in the country, although they managed to pare losses later in the session.

Bankia shares were down 8 percent, with Santander and Banco de Sabadell also showing significant losses.

Europe Stocks Extend Gains After US Jobs Data
European shares inched up on Friday, as investors took advantage of the past two sessions' losses to snap up equities more cheaply, reassured by a run of solid data from China, Europe and the United States.

In Spain, Prime Minister Mariano Rajoy and members of his ruling Popular Party (PP) continue to be rocked by allegations of taking improper cash payments from business donors.

The party denies any wrongdoing. There are some expectations that the mounting political pressure could prompt Rajoy to unveil a package of stimulus measures on Friday and this could include tax breaks for entrepreneurs and small-to-medium sized businesses.

In stocks news, French bank Credit Agricole was hit by 3.8 billion euros ($5.16 billion) in charges including writedowns on acquisitions made before the financial crisis; shares were down 2.21 percent.

In the Netherlands, the government announced it was nationalizing financial firm SNS Reaal, after a private investor-led rescue collapsed.

Sweden-based appliance manufacturer Electrolux announced fourth-quarter earnings showing weakness in European sales.

  Price   Change %Change
FTSE
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DAX
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CAC 40
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POP
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CABK
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BBVA
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ELUX.B
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BT.A
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ROSN1
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BES
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ACA
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FTSE EUR 300
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IBEX 35
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BKIA
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SAB
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PMI
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STOXX600
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