Payrolls lift European shares

European shares clocked a sixth consecutive higher close yesterday as unexpectedly robust US employment data and pleasing earnings from Unilever helped ease investors' worries about an economic slowdown.

But concern by some that the strong US jobs report would give the Federal Reserve ammunition to continue raising interest rates put a lid on market gains, as did a fresh spike in oil prices to well over $51 a barrel.

Standout stock movers included Jarvis, off 12 per cent after a source told Reuters the struggling British engineering firm had warned creditors it may need to borrow £20 million to last it until August.

By 1540 GMT, the FTSEurofirst 300 index was 0.5 per cent higher, having erased earlier losses to end unofficially at 1,086.2 points - its highest close since April 14. The DJ Euro Stoxx 50 index was up 0.4 per cent at 3,017.3.

The FTSEurofirst index of pan-European shares ended the week 2.4 per cent higher than it had started, putting gains for 2005 at 4.3 per cent and standing only two per cent below multi-month highs set at the start of last month.

Sentiment was bolstered by an economic report showing US employers had created a surprisingly high 274,000 new jobs last month and added more working in each of the two preceding months than first thought - quelling fears about an economic slowdown.

"The markets certainly got a very definite directional lead from the US payrolls," said economist David Brown at Bear Stearns. "This is an extremely strong employment report, which will put an end to recent market speculation about an economic soft spot emerging in the United States," he added.

"With much stronger jobs creation, higher earnings growth and longer hours worked, what more could the markets ask for in terms of vindicating stronger recovery?"

A Reuters survey of economists had forecast 170,000 jobs were created last month.

The report, which came after a string of disappointing economic numbers, squashed speculation that the Fed might pause in its monetary tightening any time soon, putting US and European debt markets under pressure.

Economy-sensitive technology stocks gained the most from the upbeat report, with telecoms equipment makers Nokia and Ericsson up around three per cent each.