london: European stock markets turned in a mixed performance yesterday, with several exchanges overcoming the impact of news that the US jobless rate had shot to 10.2 percent of the labour force in October.
Share prices generally fell following the US government report but later managed to rebound on corporate results seen as positive. The London FTSE 100 index gained 0.33 percent to end the week at 5,142.72 points while in Paris the CAC 40 was essentially flat, dipping 0.04 percent to 3,707.29. The Frankfurt Dax added 0.13 percent to reach 5,488.25 points.
Elsewhere there were gains of 0.52 percent in Brussels, 0.27 percent in Madrid and 0.13 percent on the Swiss Market Index. By contrast, Milan fell 0.14 percent and Amsterdam 0.22 percent. On Wall Street too stocks wobbled following the employment news but later inched into positive territory.
The Dow Jones Industrial Average was up 0.05 percent at 10,010.87 at mid-day while the Nasdaq composite had added 0.26 percent to reach 2,110.85. The Labour Department report, seen as one of the best indicators of economic momentum, showed a rise in the jobless rate, up from 9.8 percent in September, to the highest level since 1983.
But the number of jobs lost narrowed to the lowest level in over a year and was down more than 13 percent from September. Analysts said the report highlighted slow progress in bringing down unemployment as the economy emerges from recession.
“This report is a soft start to the fourth quarter,” said Cary Leahey, senior economist at Decision Economics. Leahey said the news suggested that companies remain reluctant to expand hiring as they struggle to restore profitability. “Added Patrick O’Hare at Briefing.com: “The labour market is very weak ... The rate of nonfarm payroll declines may be abating, but we fear the seeds of a jobless recovery have been firmly planted.”
Bonds were mixed. The yield on the 10-year US Treasury bond eased to 3.520 percent from 3.533 percent Thursday and that on the 30-year bond increased to 4.427 percent against 4.412 percent. Bond yields and prices move in opposite directions.
In Europe investor sentiment was also supported by a realisation that the number of US jobs lost in October, 190,000, represented a slowing in the job destruction trend. “10.2 percent is clearly a bad score,” said Wilfrid Beau of Meeschaert Gestion Privee, referring to the unemployment rate.
In London British Airways jumped 6.71 percent despite reporting a quadrupling in first half losses and announcing plans for further job cuts.
Another winner, Royal Bank of Scotland, gained 5.25 percent after posting a net loss of 1.8 billion pounds and predicting a slow recovery despite massive state support. But core retail banking operations were profitable.
In Paris Credit Agricole was the day’s big winner, climbing 3.31 percent after forecasting an increase in profit during the third quarter. Electricity group EDF lost 3.19 percent. The group said yesterday that its EPR nuclear reactor in northwest France would enter commercial service in 2013, having until now spoken of 2012.
In Frankfurt Lufthansa rebounded from declines earlier in the week on projections of a loss this year and gained 2.98 percent. A rally on Wall Street on Thursday helped Asian markets yesterday. Hong Kong added 1.63 percent, Tokyo 0.74 percent and Sydney 1.91 percent, while Shanghai rose for the sixth day in a row.
