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European stocks open sharply higher in risk-on trade; DAX jumps 1.65%

Published 07/11/2016, 03:29 AM
© Reuters.  European stocks rally as U.S. jobs report boosts sentiment
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Investing.com - European stocks opened sharply higher on Monday, as Friday’s upbeat U.S. employment data continued to boost optimism over the strength of the world’s biggest economy

During European morning trade, the EURO STOXX 50 rallied 1.39%, France’s CAC 40 advanced 1.47%, while Germany’s DAX 30 jumped 1.65%.

The Labor Department reported on Friday that the U.S. economy added 287,000 jobs last month, well above the 175,000 jobs forecast by economists. Average hourly earnings were up 2.6% compared with a year earlier.

The report also showed that the unemployment rate ticked up to 4.9% and May’s payrolls figure was revised down to 11,000 from a previously reported 38,000, the smallest monthly increase since 2010.

The strong jobs report was seen as unlikely to alter the Federal Reserve’s cautious plans for raising interest rates.

Financial stocks were broadly higher, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) rallied 1.31% and 1.77%, while Germany’s Commerzbank (DE:CBKG) and Deutsche Bank (DE:DBKGn) advanced 1.38% and 1.32%.

Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) jumped 1.36% and 1.78% respectively, while Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) climbed 1.59% and 1.16%.

Elsewhere, Airbus Group (PA:AIR) surged 2.06% as the company was set to announce a key order for 8-10 of its biggest twin-engined model, the A350-1000, from Virgin Atlantic.

The aircraft maker was also expected to announced a deal with Germania for planes that would be valued at $2.5 billion at list prices, according to a Reuters report.

In London, commodity-heavy FTSE 100 gained 0.72%, boosted by sharp gains in the mining sector.

Shares in Bhp Billiton (LON:BLT) and Rio Tinto (LON:RIO) rallied 2.48% and 2.74% respectively, while Anglo American (LON:AAL) surged 4.44% and Glencore (LON:GLEN) soared 5.16%.

Financial stocks added to gains, as HSBC Holdings (LON:HSBA) jumped 1.03% and Barclays (LON:BARC) advanced 2.59%, while Lloyds Banking (LON:LLOY) climbed 2.72% and the Royal Bank of Scotland (LON:RBS) rallied 3.67%.

On the downside, Rolls-Royce (LON:RR) saw shares tumble 1.29% after the luxury carmaker said it is buying the 53.1% of aerospace group Industria de Turbo Propulsores SA that it doesn't already own from Spanish engineering company SENER Grupo de Ingenieria SA for €720 million.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.50% gain, S&P 500 futures a 0.45% climb, while the Nasdaq 100 futures indicated a 0.57% increase.

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