Europe close: Stocks mixed as US non-farm payrolls beat estimates
European stocks were mixed as the US non-farm payrolls report smashed expectations.
US non-farm payrolls rose by 295,000 in February, ahead of forecasts for an increase of 235,000, despite severe winter weather. The unemployment rate fell by two tenths of a percentage to 5.5%, from 5.7% in the prior month, compared to estimates of 5.6%. However, average hourly earnings increased by 0.1% month-on-month in February, missing projections for a 0.2% gain, after a 0.5% climb the prior month.
"All in all another strong set of labour market data that supports the case for an end to zero-interest-rates, which we expect to come in July with a first Fed rate hike by 25bp," said Christian Schuluz, analyst at Berenberg.
The euro dropped 1.52% to $1.0862 at end of trading, a new 11-year low, following the report.
Meanwhile, Eurostat confirmed that Eurozone gross domestic product (GDP) rose 3% in the fourth quarter compared to the previous three months. GDP was 0.9% higher than the year-ago period.
“The second estimate and breakdown of Eurozone GDP in Q4 confirmed that the region’s recovery remained very weak at the end of last year but provided some tentative signs that it is becoming better balanced,” said Capital Economics.
The European Central Bank (ECB) on Thursday raised its projection for the rate of economic expansion this year to 1.5% from 1%, saying it expects its quantitative easing programme to boost the recovery. The ECB also announced its QE programme would begin on Monday.
Separately, German industrial production rose more than expected in January, driven by an increase in construction, according to data from the Economy Ministry in Berlin. Output, adjusted for seasonal swings, gained 0.6% in January following a revised 1% climb in December. Analysts had predicted a 0.5% rise. Production grew 0.9% compared to a year earlier.
In the UK, the Bank of England/GfK's12-month inflation expectations fell to 1.9% in February from the earlier estimate of 2.5%.
Banks edge higher
Banco BPI SA gained after its board advised shareholders to reject a bid by CaixaBank SA, saying the offer is too low. Banco Comercial Portugues SA, which has said it is prepared to assess a merger with BPI, rallied.
Scor SE advanced following reports Sompo Japan Nipponkoa Holdings Inc. plans to buy a 15% stake in the French reinsurer.
Mining stocks declined, including Randgold Resources and Fresnillo, as metal prices edged lower.
PSA Peugeot Citroen jumped after Euronext NV said the French carmaker will replace Gemalto NV on the benchmark CAC 40 Index from 23 March. Gemalto’s shares slid.
Bureau Veritas SA declined after Wendel SA said it is selling an 11% holding in the testing company.
Brent crude slumped 0.93% to $59.92 per barrel at close of trading, according to the ICE.