European stocks gained and the euro strengthened on positive jobs data from the US and growing signs that a coordinated rescue for eurozone banks is in the works.
A day after the European Central Bank and the Bank of England took fresh steps to boost credit, higher-than-expected US jobs data helped ease concerns that the world’s biggest economy was at risk of slipping back into recession.
On the negative side, Moody’s downgraded its credit ratings for a dozen British banks, including state-rescued Royal Bank of Scotland and Lloyds TSB, highlighting worries over the banking sector and the need for European governments to help.
In afternoon deals, London’s benchmark FTSE 100 index edged up 0.09 per cent to 5,295.84 points, Frankfurt’s DAX 30 gained 0.15 per cent to 5,653.74 points and in Paris the CAC 40 rose 0.51 per cent to 3,091.12.
The euro edged up to $1.347 from $1.3433 in New York late Thursday after briefly rising briefly above $1.35 for the first time this week.
US stocks were mostly higher in opening trade Friday, lifted by the report showing the US economy created more jobs than expected in September.
The Dow Jones Industrial Average added 0.40 percent in the first minute of trade, building on three straight sessions of gains. The broader S&P 500 climbed 0.18 per cent while the tech-heavy Nasdaq Composite fell 0.08 per cent.
The US economy added 103,000 jobs in September, a burst of hiring that followed a sluggish summer. The figure at least temporarily calms fears of a new recession that have hung over Wall Street and the nation for weeks.
The Labour Department also said on Friday that the US added more jobs than first estimated in July and August. The government’s first reading had said the economy added zero jobs in August. The unemployment rate stayed at 9.1 per cent.
While the report was clearly better than feared, it also showed the economy is not gaining much momentum, said Tom Porcelli, chief US economist at RBC Capital Markets.
“It moves you away from the ledge,” he said. Slower hiring has put pressure on President Barack Obama little more than a year before the 2012 election.
With Obama facing a tough re-election battle and declining approval ratings, the Republicans see him as vulnerable and have been blocking much of his legislative agenda. Obama in recent days has taken a tougher new tone to push a job-creation plan aimed at reducing unemployment. ( From The Gulf Today )