European stock markets remain stable despite mixed signals from US jobs data

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European stock markets were little changed on Friday as positive corporate earnings offset higher-than-expected U.S. jobs data and hopes of an imminent interest rate cut by the U.S. Federal Reserve were dashed.

European stock markets remain stable despite mixed signals from US jobs data

The pan-European Stoxx 600 was flat throughout the day, close to the two-year high it hit earlier in the week. Germany’s DAX 40 index hit a new intraday record high and closed up 0.4 per cent.

Danske Bank led the European benchmark index with an 8.1% jump after announcing fourth-quarter results and a share buyback programme.

Shares of French pipe maker Vallourec climbed 3.1 per cent after it announced that its 2023 results are expected to beat its previous outlook.

Shares of Mercedes-Benz also fared well in the DAX index, rising 2% after reporting preliminary annual free cash flow from its industrial business that beat market expectations.

Tech stocks edged up 0.3% after Meta Platforms and Amazon.com reported better-than-expected quarterly results.

However, US job growth accelerated in January, with wages posting their most significant increase in almost two years, suggesting continued strength in the labour market. This could pose a challenge to financial markets’ current expectations that the Federal Reserve will begin cutting interest rates in May.

Positive earnings reports from Europe prompted the benchmark index to rise for a second consecutive week, even though earnings for Stoxx 600 companies are expected to fall by 8.5 per cent year-on-year.

Market sentiment was tempered by the fact that policymakers have delayed a rate cut and money markets now expect the European Central Bank to cut rates less this year.

Electrolux shares recovered from earlier losses to close 0.7% higher after the company acknowledged weak consumer sentiment in early 2024.

On the other hand, oil and gas stocks fell 1.4 per cent, dragged down by a 1.5 per cent drop after BP closed its largest hydrocarbon refinery in the US Midwest.

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