European stock markets rebounded from early losses last Friday as investors mulled the impact of US jobs data amid growing concerns over the Federal Reserve’s bond-buying scheme, dealers said. Minutes from the Fed’s December policy meeting indicated that the US central bank’s huge monetary easing measures could be scaled back sooner than expected.
But financial markets also had in hand the US government’s jobs report for December, which showed only a bit of growth, as expected, prompting some to hope that the Fed would stay in stimulus mode.
In London, the FTSE 100 index of top companies added 0.7 per cent to close at 6,089.84 points, Frankfurt’s DAX 30 index was up by 0.26 per cent at 7,776.37 points and the Paris CAC 40 gained 0.24 per cent to 3,730.02.
On Wall Street, the Dow Jones industrial index was essentially unchanged at 13,397.5 points in morning trading, while the S&P 500 edged up 0.18 per cent and the Nasdaq Composite slipped 0.11 per cent.
The euro fell in early trading, but bounced back to $1.3053, from $1.3052 on Thursday in New York.
British investor sentiment was hit by news that the British services sector shrank last month for the first time for two years, stoking speculation over contracting economic growth in the fourth quarter of 2012.
The Markit/CIPS purchasing managers’ index (PMI) survey showed a reading of 48.9 in December, down from 50.2 in November. That was below the 50 mark which separates growth from contraction.
For Germany, home to Europe’s biggest economy, the reading was better however, as it posted a preliminary figure of 47.2 points, up from 46.5 points in November. That offered “some hope that the eurozone is showing signs of lifting out of its deep double-dip recession,” said Markit chief economist Chris Williamson.
Shares had broadly climbed on Wednesday and Thursday after US lawmakers agreed a deal to avert the fiscal cliff of tax hikes and spending cuts. But while the tax problem was addressed, another row is expected as a deal must be struck within two months to deal with billions of dollars of spending cuts and raise the US debt ceiling.