Tags: Europe | stocks | jobs | unemployment

European Stocks Rally as US Jobless Rate Falls to Six-Year Low

Friday, 03 October 2014 11:57 AM

European stocks rebounded from the biggest selloff in 15 months as a U.S. report showed better-than-estimated hiring sent the unemployment rate in the world’s largest economy to a six-year low.

EasyJet Plc rallied the most since November after saying full-year pretax profit jumped at least 20 percent. Immofinanz AG advanced 1.9 percent after UniCredit SpA agreed to sell its stake in an Austrian real estate unit to another bidder. Greek stocks fell for a third day, posting the worst performance among markets in western Europe.

The Stoxx Europe 600 Index gained 0.9 percent to 335.02 at 3:33 p.m. in London. The equity benchmark Thursday plunged 2.4 percent amid concern the European Central Bank’s asset-buying plan won’t be enough to revive the region’s economy.

“It’s a bit of a bounce for European markets from yesterday’s selloff,” Andrea Williams, who helps oversee 50 billion pounds ($80 billion) at Royal London Asset Management, said by phone from London. “We’re on the brink of the third- quarter earnings season. If we start to see earnings upgrades, that should support markets.”

The U.S. jobless rate declined in September to 5.9 percent, the lowest level since July 2008, and employers added more workers than projected, Labor Department data showed. The 248,000 gain in payrolls followed a 180,000 August increase that was bigger than previously estimated. The median forecast of economists in a Bloomberg survey called for a 215,000 increase.

Weekly Drop

The Stoxx 600 is heading for a second weekly loss, extending its decline from a six-year high reached in June to 4.2 percent. The VStoxx Index, a gauge measuring volatility expectations in the euro zone, dropped 5.1 percent today. The measure jumped 11 percent yesterday, the most on an ECB rate- announcement day since at least January 2013. It fell seven out of 10 times on those days.

“Investors are disappointed because the ECB did not come out with the big guns,” Jacques Porta, who helps oversee about $780 million at Ofi Gestion Privee in Paris, said yesterday. “Given the significant risk of deflation in the euro area, the ECB’s actions seem a little weak.”

National benchmark indexes rose in 15 of the 17 western- European markets open today. The U.K.’s FTSE 100 jumped 1.2 percent and France’s CAC 40 rallied 0.9 percent. Germany was closed for National Day.

Profit Jump

EasyJet rallied 6.8 percent to 1,464 pence. Europe’s second-biggest discount airline said it expects to report pretax profit of at least 575 million pounds for the year ended Sept. 30. The company in July had predicted profit of no more than 570 million pounds.

Immofinanz advanced 1.9 percent to 2.20 euros. UniCredit agreed to sell its 16.4 percent stake in CA Immobilien Anlagen AG to a Cyprus-based investment fund. At least three investors including Immofinanz had bid for that stake, people with knowledge of the matter said this week.

United Utilities Group Plc gained 3.4 percent to 811 pence after announcing a revised business for 2015-2020 that cuts planned expenditure by about 370 million pounds.

Greece’s benchmark ASE Index fell 0.8 percent. ECB officials will require Greece to stay under economic surveillance to be eligible for the asset-purchase program being introduced by the central bank, according to an official involved in negotiations with the Mediterranean country.

Piraeus Bank SA lost 6.6 percent to 1.28 euros, while Opap SA slid 1.1 percent to 10.88 euros.

Tesco Plc dropped 2.9 percent to 173 pence, falling for a seventh day and extending an 11-year low. The U.K.’s biggest grocer is considering options including a rights offering of about 3 billion pounds, the Financial Times’s Alphaville blog said. A company spokesperson said it has no current plans for an offering.

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European stocks rebounded from the biggest selloff in 15 months as a U.S. report showed better-than-estimated hiring sent the unemployment rate in the world's largest economy to a six-year low.
Europe, stocks, jobs, unemployment
Friday, 03 October 2014 11:57 AM
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