Europe Markets

US Economic Strength Helps Boost Stocks


The financial sector fueled a rally in European shares on Friday, which scored their third weekly gain, after U.S. jobs data suggested the world's largest economy was proving more resilient than expected.

Banks and other interest-rate sensitive stocks such as insurers were among the largest positive influences on the European market, after the US April jobs report showed a smaller contraction than expected in the labour market and a measure of manufacturing activity beat forecasts.

The FTSEurofirst 300 index of top European shares rose 1.6 percent to close unofficially at 1,360.82 points, bringing the gain for this week to 2.6 percent, the third weekly rally in a row.

"(Payrolls) makes you think, along with the ISM data earlier this week, that perhaps life is not getting worse. It may not be brilliant, and obviously the housing market data from CaseShiller was pretty grim but the second half of the week has given an indication that things are not getting worse," said Philip Isherwood, a strategist at Dresdner Kleinwort.

"The equities market looks forward and you can build a plausible optimism on that."