NEWS / Central Banks

Euro bourses upbeat on US data, corporate news

LONDON: European stock markets posted gains yesterday on positive corporate news and solid labour market data from the US.

The London FTSE 100 index advanced 0.73% to end the week at 5,949.10 points, while in Paris the CAC 40 rose 0.36% to 5,183.45. The Frankfurt DAX added 0.29% to close at 5,876.54.

The Euro Stoxx 50 index of leading eurozone shares rose 0.32% to finish at 3,820.89.

US stocks were higher in the morning as investors welcomed the latest snapshot on the country's labour market, which showed a better pace of hiring than most Wall Street analysts had expected.

At 1530 GMT the Dow Jones Industrial Average was up 0.42% at 11,429.01 while the Nasdaq composite had gained 0.25% to 2,189.20.

The markets opened higher after the Labor Department reported that US employers created 128,000 new jobs in August, while the jobless rate dipped to 4.7% from 4.8% in July.

The non-farm payrolls figure, seen as one of the best indicators of economic momentum, rose from July's revised growth of 121,000, and came just ahead of Wall Street's consensus forecast of 125,000 for August.

"The good news is that the hourly average wage showed no increase in the inflationary pressures," said Peter Cardillo, an analyst at SW Bach.

In London gas distributor Centrica added 1.78% to reach 300.25 pence on renewed speculation that it might be acquired by Gazprom of Russia.

Steel maker Corus, also reportedly an item of interest for Russian buyers, gained 1.85% to close at 399.50 pence.

Oil companies were among the day's few losers in line with weakening crude prices.

BP shed 0.17% to reach 596 pence while Royal Dutch Shell lost 0.16% to end the session at 1,877 pence.

In Paris engineering group Alstom rose 1.77% to 74.90 euros after winning a contract worth more than 350mn euros from electricity utility EDF to build a turbine for a nuclear power plant in northern France.

Pharmaceutical giant Sanofi-Aventis added 0.93% to reach 70.70 euros. The company issued a profit warning owing to competition in the US for its blockbuster blood-thinner Plavix from a generic drug.

Shares in the group rose as investors shrugged off the announcement from Sanofi, which slashed its forecast for growth in earnings per share this year from 12% to just two%.

Retailer Carrefour gained 1.12% to 48.70 euros on positive comments from analysts at SG Securities.

In Frankfurt automaker Volkswagen added 1.54% to close at 63.31 euros despite an announcement that its Audi subsidiary was recalling nearly 36,000 of its A8 model worldwide because of an airbag problem.

Travel operator TUI rose 1.17% to 15.50 euros after announcing on Thursday that it was to merge its airline companies in Germany and re-shuffle its management.

Elsewhere there were gains of 0.47% to 3,924.26 on the Bel-20 in Brussels, 0.58% to 38,159 on the SP/Mib in Milan, 0.40% to 12,192 on the Ibex-35 in Madrid, 0.26% to 8,189.1 on the Swiss Market Index and 0.41% to 470.93 on the AEX in Amsterdam.

The dollar lost steam against the euro in late trading on fresh concerns over the US housing market and after posting gains following a positive US job creation report.

The single European currency was at $1.2819 from $1.2814 late on Thursday in New York. In the immediate aftermath of the US jobs announcement the euro fell to $1.2770 before recovering lost ground.

The dollar was meanwhile trading at ??117.25 against ??117.37 on Thursday.

The US currency in trading against the euro was hurt by a report from the National Association of Realtors revealing that pending home sales fell by 7.0% in July to their lowest level in three years.

Its pending home sales index, based on contracts signed in July, fell to a seasonally adjusted 105.6 in July from a downwardly revised 113.5 in June.

The pound was being traded at $1.9040 from $1.9046 on Thursday.

On the London Bullion Market, the price of an ounce of gold fell to $621.05 per ounce from $623.50 late on Thursday. - AFP