European stocks soared to close sharply higher on Friday, after investors cheered on the news that the U.S. had created 287,000 jobs during the month of June.
US jobs beat
The pan-European STOXX 600 finished 1.6 percent higher provisionally; with all sectors posting sharp gains. Despite Friday's rise, the turmoil surrounding Brexit pushed the STOXX 600 to close down 1.5 percent for the week.
All major bourses celebrated the news from overseas, with France's CAC and Germany's DAX rallying to close up 1.8 and 2.2 percent respectively. The U.K.'s FTSE 100 lagged behind however, finishing up 0.9 percent, while its domestically-focused FTSE 250 index jumped 1.75 percent.
Friday's employment report wowed investors after the Bureau of Labor Statistics announced that the U.S. economy had added 287,000 jobs during the month of June, beating expectations. Economists expected nonfarm payrolls to show growth of 175,000 for the month, according to a Reuters poll. The unemployment rate came in at 4.9 percent, also above expectations.
The jobs data is especially important as the shock slowdown in May hiring was one reason the U.S. Federal Reserve cited for leaving interest rates unchanged at its meeting last month. The Brexit referendum in the U.K. also gave the Fed reason to pause before tightening rates further.
While the impressive figure has boosted markets, especially in the U.S., analysts aren't completely convinced that it will change the near-term outlook when it comes to the Fed and raising interest rates.
"While I wouldn't write off a hike at the end of the year, assuming the jobs data between now and then is very good and wage growth shows signs of improvement, the risks posed by Brexit in the near-term are likely to deter the Fed from tightening and unnecessarily causing further problems for both the economy and financial markets," Craig Erlam, senior market analyst at OANDA, wrote in a note following the jobs release.
Banco Popolare rallies 18.4%; Autos speed ahead
Banks were also a key focus for investors Friday, particularly in Italy. Shares of Banca Monte dei Paschi di Siena (BMPS) jumped 5.5 percent after the struggling bank said it was "working intensely" with authorities to find a solution for is bad loan portfolio. The lender has been told by the European Central Bank (ECB) to cut its debts by 30 percent of two-and-a-half years.
Banco Popolare said on Thursday that it had conducted internal stress tests which confirmed the banks' resilience to adverse shocks. The news sent the lender to the top of the STOXX 600, closing 18.4 percent up.
Another top performing sector was autos, finishing 3.9 percent higher overall. This comes after data from the China Passenger Car Association revealed that vehicle sales in China rose 19.4 percent last month, compared to June 2015. Porsche, Fiat Chrysler and Renault all above closed 5 percent each.
Meanwhile, a number of miners received positive ratings from the brokers. RBC raised its price target for Glencore, BHP Billiton and Rio Tinto, helping to push shares of the firms higher throughout trade.
France's Sodexo said that like-for-like nine month sales were up by 3.3 percent and it kept its full-year goals. Shares of the firm closed over 1.5 percent up.
London property stocks and housebuilders were some of Europe's best performers, including Taylor Wimpey, Bellway and Bovis Homes Group, all ending above 7.5 percent each. This comes despite UBS cutting its price target on all of the stocks.