European stocks firmer
Euro jumps after US jobs data
European stock markets closed mostly firmer yesterday as the euro rallied strongly, supported by hopes of a deal to resolve Greek’s debt crisis and very disappointing US jobs data.
Dealers said news that the US economy generated only 54,000 new jobs in May, one quarter of the previous month and way below forecasts for 169,000, spooked investors growing increasingly unhappy at signs the global economy is slowing.
Economists blamed the disappointing figures in part on the impact of Japan’s March 11 earthquake-tsunami disaster on US manufacturers as well as a jump in oil prices but the headline figures were still terrible.
The US data hit the dollar while the euro got a boost after Jean-Claude Juncker, head of eurozone finance ministers, said Greece would likely get fresh aid to save it from default after last year’s bailout package failed to do the job.
In London, the benchmark FTSE 100 index of top shares closed up 0.12 per cent to 5,855.01 points. In Frankfurt, the DAX added 0.49 per cent to 7,109.03 points while in Paris the CAC 40 was virtually unchanged.
The other European markets were mostly higher but Swiss stocks fell.
In New York, the blue-chip Dow Jones Industrial Average was down 0.34 per cent at around 1645 GMT and the tech-rich Nasdaq Composite fell 0.63 percent.
In Asian trade earlier yesterday, Tokyo fell 0.66 percent, Hong Kong lost 1.31 per cent and Sydney fell 0.38 per cent but Shanghai gained 0.84 per cent.
The euro meanwhile, jumped sharply to $1.4603 from $1.4491 in New York late Thursday while the dollar fell to ¥80.35 from ¥80.88.
The US jobs report was weak across the board, said James Knightley at ING, noting that the unemployment rate, which edged up to 9.1 per cent, remained stubbornly high, meaning US interest rates will have to remain at record lows.
Meanwhile, Greece won pledges of a new bailout deal coupled with fresh funds to pay its bills as Prime Minister George Papandreou got a positive EU-IMF review of his nation’s public finances.
“There is an agreement,” Papandreou said as the EU, the International Monetary Fund and the European Central Bank agreed to extend the next tranche of funds under Greece’s 110-billion-euro debt rescue accord package, most likely in July.
After talks in Luxembourg, Mr Papandreou and Mr Juncker indicated that Athens stood poised also to win a fresh bailout deal, including help from private banks.