Europe: Strong US jobs numbers, trade optimism bolster European shares

[BENGALURU] European shares closed higher on Friday, extending gains after impressive US jobs data bolstered sentiment buoyed by positive statements from Washington regarding trade talks with China.

The pan-European STOXX 600 index finished up 1.2 per cent, helping erase nearly all of a tumultuous week's losses.

Stocks swung wildly this week on conflicting statements and reports regarding the progress of US-China trade negotiations, as well as some weak economic indicators from Europe.

Data on Friday showed that US job growth increased by the most in 10 months in November, confirming that the economy remained on a moderate expansion path. That helped quell some fears of a negative rub-off on growth from a trade war with China.

"The market has been looking at the data with rapt attention, and of course we had what could be called a blowout number," said Ken Odeluga, a market analyst at City Index.

"The possibility of the beginnings of some sort of slowdown tends to be obliviated by a reading like that. And the details tend to support it as well."

This added to optimism that stemmed from Mr Trump's comments on Friday that discussions with China were "moving right along", which was later echoed also by White House adviser Larry Kudlow. From their end, Beijing officials said they will waive import tariffs for some soybeans and pork shipments from the United States.

Gains on the day in Europe were broad-based and led by commodity-linked stocks. Retail shares were also in the top mix, with Marks & Spencer rising 4.1 per cent after JPMorgan upgraded the stock to "neutral" from "underweight".

London's FTSE 100 posted its best day in more than four months as sterling weakened and as energy firms rode oil prices higher. On the week, however, the FTSE posted its worst loss in two months.

Investors are bracing for an action-packed week as Britons go to vote on Dec 12, with recent opinion polls suggesting the ruling Conservatives will win an outright majority needed for Britain's smooth exit from the European Union.

Limiting gains on the Frankfurt index were figures showing Germany's industrial output unexpectedly dropped in October, reviving worries over the growth outlook for Europe's economic powerhouse.

Among other stocks, shares in Ipsen slid 13.6 per cent after the French pharmaceutical company put on hold clinical studies of palovarotene, which treats bone disorders.

REUTERS