European stocks close mixed

European shares closed mixed, giving up early gains after much weaker-than-expected US jobless claims figures knocked sentiment ahead of a key US employment report, dealers said.

They said investors started off brightly following better-than-expected US figures on Wednesday on private sector job creation only to be hit when the latest jobless claims release sparked fresh doubts over the strength of the recovery.

The week so far has seen stellar gains on the back of very strong corporate results, especially for the banks, and a whiplash reaction to a series of contradictory US economic reports.

With investors nervous ahead of today’s US jobs figures, trade has been choppy as they adjust positions following each release.

Dealers said the hope is that today’s announcement could at least clear the air, showing the US economy moving along steadily, rather than at risk of falling back into recession.

In London, the FTSE 100 index of leading shares lost 0.38 per cent to 5,365.78 points.

In Paris, the CAC 40 edged up 0.09 per cent to 3,764.19 points and in Frankfurt the DAX made a fractional gain of 0.04 per cent to 6,333.58 points.

Dealers said there was no reaction to as-expected decisions to leave interest rates unchanged by the European Central Bank and the Bank of England, with all eyes on the US lead.

“European markets are unfazed by the rates decisions which came in as expected,” CMC Markets analyst Michael Hewson said, adding: “Markets (are) still focussing on earnings ahead of tomorrow’s key US payrolls data.”

Anthony Grech of IG Index said the US figures unsettled the London market, will all eyes on today’s announcement.

Even continued good results for the banks were not enough.

Elsewhere in Europe, Amsterdam fell 0.78 per cent, Milan was down 0.76 per cent and Brussels, Madrid and Swiss stocks were virtually unchanged.

In Asian trade earlier yesterday, Tokyo jumped 1.73 per cent but Hong Kong was flat while Sydney rose 0.54 per cent.

In London, Barclays ­tumbled 4.66 per cent despite a 29 per cent jump in first half earnings, with investors worried by its investment bank performance.

“Company results have failed to invigorate the markets today, with earnings from Barclays and Commerzbank not enough to inspire investors to add more risk to their portfolios,” said City Index analyst Joshua ­Raymond.

“Having seen a number of banks already outperform earnings consensus, expectations are fairly high – meaning that only a bumper set of profits were going to inspire investors to build on their bank gains.”

Commerzbank lost 2.20 per cent in Frankfurt.

“US equity markets are under some pressure ... following an unexpected increase in weekly initial jobless claims,” analysts at Charles Schwab & Co said.

New claims for US jobless ­benefits rose unexpectedly last week, rising 4.1 per cent to 479,000 for the highest level since April, highlighting concerns that rising unemployment could ­scuttle the economic recovery.