Europe close: Strong sentiment sees stocks finish firmer
By Josh White
Date: Friday 02 Jun 2023
(Sharecast News) - European markets ended the week on a high note on Friday, riding a wave of optimism after US lawmakers reached an agreement to raise the nation's debt ceiling, mitigating the threat of a government default.
The pan-European Stoxx 600 index advanced 1.51% to close at 462.15, reflecting broad-based gains across European markets.
Germany's DAX finished up 1.25% at 16,051.23, while the French CAC 40 outperformed, climbing 1.87% to 7,270.69.
In the UK, the FTSE 100 rallied, closing 1.56% higher at 7,607.28.
Currency markets were meanwhile mixed, with the euro last 0.12% higher on sterling to trade at 86.02p, while it weakened 0.4% against the dollar to change hands at $1.0719.
"Global stock markets ended the week on a more positive note as the US government agreed to a raised debt ceiling," said IG senior market analyst Axel Rudolph.
"Much stronger-than-expected US job creation data points to a robust economy even if the unemployment rate rose to a higher-than-expected 3.7%."
France manufacturing sector expands, US payrolls beat forecasts
On the economic front, France's manufacturing sector performance defied expectations as output climbed by 0.8% in April, compared to March.
The upward swing stood in stark contrast to the 1.1% contraction recorded in the prior month, and exceeded economists' modest projections for 0.3% growth for the month.
Meanwhile, the United States employment landscape was buoyant as data from the Bureau of Labor Statistics revealed the creation of a robust 339,000 jobs in May.
The figure markedly outpaced the estimated increase of 190,000.
Additionally, the April nonfarm jobs growth figure was revised upward by 41,000, registering a substantial surge of 294,000.
However, the American unemployment rate rose slightly to 3.7% in May, up from 3.4% in April - a higher increase than the anticipated 3.5%.
Annual wage growth meanwhile showed signs of slowing, dipping slightly to 4.3% from 4.4%.
"As labour market conditions come into slightly better balance, the upward pressure on wage growth is easing," said Paul Ashworth, chief North America economist at Capital Economics.
"Despite a 0.3% m/m increase in May, the annual rate of average hourly earnings growth dropped back to 4.3%, from 4.4%.
"The upshot is that the Fed can still afford to skip a rate hike in June."
Dechra jumps on takeover offer, French industrials rise
In equities, Dechra Pharmaceuticals closed 7.65% higher after the UK-based veterinary pharmaceuticals manufacturer announced a £4.46bn acquisition bid by private equity firm EQT.
Sectra, a Swedish firm specialising in medical imaging and cybersecurity, outperformed the broader market, with its shares leaping 8.17%.
The rise came after the company reported an improvement in recurring revenue and operating profit.
French industrial firms Michelin and Schneider Electric enjoyed a positive day, propelled by robust manufacturing data from the country.
Michelin saw its shares climb by 2.14%, while Schneider Electric appreciated by 1.48%.
Reporting by Josh White for Sharecast.com.
STOXX 600 +6.88 (+1.51%) 462.15
RISERS
SBB AB +53.3% SEK 5.28
Fastighets AB Balder +8.33% SEK 39.54
Faurecia SE +7.94% €21.27
Sagax AB +7.81% SEK 232.00
Grand City Properties SA +7.79% €7.54
FALLERS
Uniper SE -21.28% €6.20
Deutsche Telekom -9.06% €19.14
Tele2 AB -3.4% SEK 94.92
BT Group -3.36% 143.65p
Polymetal International -2.56% 190p
DAX +197.57 (+1.25%) 16,051.23
RISERS
Covestro AG +6.38% €
Adidas AG +5.82% €159.52
Continental AG +5.37% €66.68
Vonovia SE +5.22% €17.85
BASF SE +4.33% €46.79
FALLERS
Deutsche Telekom AG -0.06% €19.14
Hannover Rueck SE -0.1% €205.20
E.ON SE -0.04% €11.32
Symrise AG 0.00% €101.05
Henkel AG & Co +0.4% €74.80
CAC 40 +133.26 (+1.87%) 7,270.69
RISERS
Unibail-Rodamco-Westfield SE +5.35% €44.70
Renault SA +5.03% €33.10
ArcelorMittal +4.66% €24.93
Societe Generale SA +4.27% €22.61
Compagnie de Saint-Gobain SA +3.96% €54.67
FALLERS
Orange SA -1.32% €11.03
Capgemini SE -0.06% €167.60
Thales SA 0.00% €133.00
Engie SA +0.11% €14.10
Vivendi SE +0.48% €8.38
FTSE 100 +117.01 (+1.56%) 7,607.28
RISERS
Dechra Pharmaceuticals +7.65% 3,632p
Prudential +5.68% 1,153p
Antofagasta +5.54% 1,456.5p
Anglo American +5.15%
BHP Group +4.59% 2,346p
FALLERS
Evraz -12.59% 80.89p
BT Group -3.36% 143.65p
Polymetal International -2.56% 190p
Vodafone Group -0.66% 75.63p
SSE -0.64% 1,868p
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