Investing.com - European stocks opened sharply higher on Monday, as they recovered from heavy losses posted on Friday after the relatively positive U.S. employment report did nothing to suppress hopes for an upcoming rate hike by the Federal Reserve.
During European morning trade, the EURO STOXX 50 jumped 0.97%, France’s CAC 40 rallied 1.03%, while Germany’s DAX 30 advanced 0.87%.
The Labor Department reported on Friday that the U.S. economy added 173,000 jobs last month, slowing after an upwardly revised gain of 245,000 in July. It was the smallest increase in employment in five months and was below expectations for 220,000.
However, the unemployment rate ticked down to 5.1%, its lowest level since April 2008 from 5.3% in July, while average hourly wages rose by a stronger-than-expected 2.2%, adding to hopes that the U.S. central bank could raise short term interest rates this month.
European equities had strengthened broadly after the European Central Bank indicated last Thursday that it could expand its quantitative easing program amid increased downside risks to its inflation outlook.
Financial stocks were broadly higher, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) rallied 1.06% and 1.45%, while Germany's Commerzbank (XETRA:CBKG) and Deutsche Bank (XETRA:DBKGn) jumped 1.65% and 1.40%.
Among peripheral lenders, Italy's Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) advanced 1.35% and 1.20% respectively, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) climbed 0.79% and 0.91%.
UniCredit made headlines after Chief Executive Officer Federico Ghizzoni told Italian newspaper La Repubblica that the bank doesn’t need to raise capital.
Elsewhere, Enel (MILAN:ENEI) SpA rallied 1.74% after the Italian utility said it will meet its 2015 financial targets.
In London, commodity-heavy FTSE 100 climbed 1.20%, boosted by sharp gains in the mining sector.
Shares in Bhp Billiton (LONDON:BLT) advanced 2.14% and Anglo American (LONDON:AAL) jumped 2.57%, while rivals Antofagasta (LONDON:ANTO) and Glencore (LONDON:GLEN) soared 6.82% and 11.12% respectively.
Financial stocks added to gains, with the Royal Bank of Scotland (LONDON:RBS) rose 0.29% and Lloyds Banking (LONDON:LLOY) gained 0.33%, while HSBC Holdings (LONDON:HSBA) and Barclays (LONDON:BARC) climbed 0.63% and 0.66% respectively.
On the downside, Tesco (LONDON:TSCO) saw shares drop 0.50% following reports the retailer has agreed to sell its South Korean business, Homeplus, to a group of investors in a deal valuing its biggest overseas venture at £4.2 billion.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.75% increase, S&P 500 futures signaled a 0.86% climb, while the Nasdaq 100 futures indicated a 0.86% gain.