European stock markets firmed yesterday as investors welcomed employment data in the United States and corporate financial results that were better than expected.
The gains in Europe followed a solid start to the trading day on Wall Street, but US share prices later fell after industrial giant 3M lowered its 2010 targets.
In London the FTSE 100 index rose 0.56 per cent to close at 5,677.89 points while in Paris the CAC 40 added 0.50 per cent to reach 3,834.80. The Frankfurt the DAX gained 0.42 percent to end the day at 6,595.28 points.
Elsewhere Milan rose 1.22 per cent and Madrid 0.50 per cent. The Swiss Market Index was stable and share prices slipped 0.03 per cent in Amsterdam.
Trading sentiment in Europe was generally underpinned by news that first time claims for US unemployment benefits fell more than expected last week.
Initial jobless claims for the week ending October 23 totalled 434,000, the Labour Department said, far fewer than the 458,000 claims expected by economists, raising hopes for stabilisation in a struggling job market.
News from the corporate front added to investor confidence yesterday. In Paris France Telecom jumped 3.11 per cent after disclosing that third quarter sales were up 1.1 per cent to €11.6 billion.
In Frankfurt auto maker Volkswagen rose 2.78 per cent after announcing Wednesday that third-quarter net profit soared more than 10-fold to €2.2 billion.
On the London exchange mobile phone operator Vodafone, taking direction from France Telecom, added 2.65 per cent.
Despite the gains, analysts said, market players were uneasy ahead of a meeting of Federal Reserve policymakers in the United States on November 3, when a decision is expected on the scope of further stimulus for the US recovery.
While some form of intervention, such as the purchase by the central bank of bonds and other assets, appears likely, recent improvements in the economy suggest that the scope of Fed action might not be as far reaching as had been expected.
“We’re approaching the big day – November 3 – but the size of the overall Fed envelope (of measures) is causing concern, given that the market is expecting an envelope of $500 billion,” said Frederic Rozier of Meeschaert Gestion Privee.
On Wall Street the Dow Jones Industrial Average was down 0.56 per cent at 11,063.73 at mid-day, when the Nasdaq had lost 0.45 per cent to reach 2,492.11.
Asian stocks were mixed as traders weighed reports that Fed action might be limited.
Tokyo fell 0.22 per cent and Shanghai 0.15 per cent, while Seoul ended 0.09 per cent higher.
Hong Kong rose 0.20 per cent.