European stocks rose yesterday after strong US jobs figures upstaged poor eurozone manufacturing data, while the euro hit a three-week low versus the dollar, dealers said.
London’s FTSE 100 index of top companies rose 0.11 per cent to close at 5,868.55 points, Frankfurt’s DAX 30 gained 0.38 per cent to 7,363.85 points, and in Paris the CAC 40 rose 0.49 per cent to 3,492.46 points.
In foreign exchange activity, the euro slid to $1.2836 – the lowest level since October 11 – before recovering to $1.2845 which compared with $1.2940 late in New York on Thursday.
Gold prices tumbled to $1,676.93 an ounce down from $1,716.25 Thursday.
The US economy generated a net 171,000 jobs last month and revisions put the three-month average at 170,000, though unemployment ticked up to 7.9 per cent, better news than expected for the economy and President Barack Obama as he fights to keep his job in next week’s vote.
“Good news for the US as employment growth surprised on the upside in October, adding to the other evidence of improved growth prospects in the US,” said Rob Wood of Berenberg Bank.
“Along with the Chinese economy showing signs of strengthening, this gives us hope that global growth has bottomed out,” he said.
But in the United States, optimism from the jobs report swiftly faded just days before the country picks its president.
In midday trading, the Dow Jones Industrial Average was down 0.17 per cent, the broad-based S&P 500 edged 0.09 per cent lower, and the Nasdaq Composite dipped 0.18 per cent.
The eurozone manufacturing sector meanwhile was stuck in the doldrums for a 15th consecutive month in October, getting the fourth quarter off to a weak start and offering no hope for change in the near future, a key survey showed yesterday.
The Purchasing Managers Index (PMI) compiled by the Markit research firm put the manufacturing sector on 45.4 points, better than the initial figure of 45.3 given last week but still down sharply from 46.1 in September. Anything above 50 points to growth while anything below is a contraction.
Markit said the downturn “not only deepened but also widened” in the latest survey, noting a further deterioration in new orders while new export orders fell for the 16th month in a row in October.
The data sent Spanish and Italian borrowing prices slightly higher on the secondary markets, though an analyst from BNP PArisbas said the focus for investors would be shifting from Spain and Italy to political squabbling in Greece.
Markit added that eurozone job losses mounted for a ninth successive month and at the fastest rate since July.
On Thursday, the US Conference Board index of consumer confidence for October rose to a better-than-forecast 72.2 in October, from a revised 68.4 in September, pointing to a pick-up in the crucial manufacturing sector.
Asian stock markets yesterday won a boost from the upbeat global economic data and gains in New York share prices.
Hong Kong climbed 1.33 per cent, Seoul 1.07 per cent, Shanghai closed up 0.60 per cent, while Tokyo jumped 1.17 per cent on the back of the weaker yen. (AFP)