Europe markets close slightly higher after weak US jobs data; oil prices drop 1.5%

European markets closed slightly higher on Friday as investors reacted to weaker-than-expected U.S. jobs data and digested the news that President Donald Trump has decided to withdraw from the Paris climate change deal.


The pan-European Stoxx 600 closed up 0.23 percent with most sectors and major bourses in positive territory. The U.K.'s FTSE 100 hit a fresh record high as markets opened but retreated after subdued U.S. non-farm payrolls data.

The U.S. generated a modest 138,000 new jobs in May and revised employment growth in the spring down from levels initially reported. The non-farm payrolls data seemed to add to growing evidence that a tight labor market is making it tougher for U.S. firms to fill job openings. The dollar subsequently slipped to seven-month lows against the euro.

Meanwhile, the unemployment rate dipped to 4.3 percent, down from 4.4 percent, and hit its lowest level in 16 years.

The reaction on Wall Street was muted towards the jobs numbers. U.S. equities rose to record levels on Friday. The Dow Jones industrial average traded about 45 points higher, the S&P 500 also managed a new all-time intraday high, trading 0.2 percent higher. The Nasdaq composite outperformed, rising 0.5 percent to reach an all-time high.

On the other hand, oil and gas stocks dropped over 1.3 percent, as oversupply in the market weighed on prices despite ongoing production cuts. According to Reuters, OPEC considered cutting its oil output by a further 1.5 percent when it met last week. Brent was 1.5 percent lower at $49.86 a barrel shortly after the European close while WTI dropped 1.45 percent to $47.66.

In individual stocks, Banco Popular slumped over 17 percent on reports the Spanish bank may fail if a buyer is not found.

French drug maker Ipsen jumped more than 3 percent after announcing new efforts to build upon its oncology portfolio.

Furthermore, Linde and Praxair agreed on Thursday to a $73 billion merger, creating the world's biggest industrial gasses group. Linde rose more than 2 percent.

US payrolls ahead

After positive employment and factory growth figures in Europe, PMI construction data in the U.K. rose to a 17-month high in the month of May to 56.0 from 53.1 in April.

Meanwhile, the world is reacting to President Donald Trump's decision to pull out of the Paris Climate Agreement. World leaders refused to re-open negotiations and have told Trump that this decision will harm America's interests.

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