European stocks, drawing some support from better-than-expected US jobs data, snapped four days of losses yesterday with banking and mining stocks the major gainers.
The pan-European FTSEurofirst 300 index of top shares closed up 1.3 per cent at 962.42 points in a choppy session which touched a high of 964.40 and a low mark of 949.39.
The index initially pared gains after data showed the US unemployment rate rose to 9.7 per cent, but regained ground as investors focused on the better-than-expected headline numbers with US employers cutting fewer-than expected jobs last month.
"After a few days of the markets falling we are having a respite day. US payrolls were not as bad as expected... but I think all it is, is a respite day... there is no news to create any great market optimism or pessimism," said Howard Wheeldon, strategist at BGC Partners. Banks were helped by a Goldman Sachs sector upgrade to "a modest overweight from neutral" and HSBC, Banco Santander and Credit Suisse were up 2.2-4.6 per cent.
Across Europe, the FTSE 100 index was up 1.2 per cent, Germany's DAX was 1.6 per cent higher and France's CAC 40 rose 1.3 per cent.
Miners were higher as zinc rose 2.8 per cent. Lonmin surged 9.4 per cent on speculation that former suitor Xstrata will renew a takeover bid after regulatory restrictions fall away next month.
"Xstrata has made no secret of its confidence in platinum group metals' fundamentals and its willingness to participate when valuations revert to normal ranges," Exane BNP Paribas said in a research note, upgrading Lonmin to "outperform from "underperform".
Xstrata was up 1.9 per cent, while Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, and Rio Tinto gained 1.2 to 3.7 per cent.
The automobile sector featured among high movers. Daimler's rose 5.1 per cent after its chief executive told German newspaper Bild the carmaker would perform better in 2010 and was set to achieve significantly more than €4 billion ($5.7 billion) in savings in 2009.
Shares in PSA Peugeot Citroen gained 7.3 per cent, after French daily La Tribune reported the carmaker was mulling an alliance with Japanese Mitsubishi Motors Corp.
A PSA Peugeot Citroen spokesman said that to his knowledge "there was nothing new, adding "I am not confirming anything."
Deutsche Telekom was up 2.9 per cent. The Financial Times said in its online edition the company was in talks with Vodafone, France Telecom and Telefonica about selling its British unit T-Mobile UK. T-Mobile was not available for comment.
Defensive stocks were out of favour. Drugmaker AstraZeneca was 0.6 per cent lower and French supermarket group Carrefour was down 1.2 per cent.