Europe close: Basic resource stocks surge
European stock benchmarks continued to advance, boosted by a sharp jump in basic resource stocks as oil and copper futures extended their recent rally.
The benchmark DJ Stoxx Europe 600 index finished 0.70% higher, alongside gains of 0.74% in Germany’s DAX while France's Cac-40 notched up an advance of 0.92% higher.
Shares in basic resources companies lent the most support as metals prices advanced and copper hit its highest level in more than three months, with the Stoxx 600 index for the sector up by 6.05% to 283.29 by the close of trading.
Oil prices also continued powered ahead, with West Texas Intermediate crude oil futures gaining 3.03% to $35.65 a barrel on the ICE and Brent crude futures up by 3.76% at $38.52.
Three-month copper futures on the LME ended the day up by 2.6% to $4,973.00 per metric tonne.
America's economy created 242,000 jobs in February, easily surpassing analysts' consensus forecast for a gain of 188,000, with upwards revisions to data for December and January tacking on a further 30,000 posts to the tally.
Average hourly earnings however dipped by 0.1% month-on-month (consensus: 0.2%).
Commenting on the data, Ian Shepherdson, chief economist at Pantheon Macroeconomics said the drop in hourly earnings in Friday’s report was misleading, continuing a pattern of undershooting in months when the 15th – the payday for people paid semi-monthly - falls after the employment survey week.
“Same thing in March, but then there'll be a huge rebound, putting wage growth y/y at new highs […] We don't expect payrolls to keep rising at anything like this pace, but the underlying momentum here is strong. […] That means you, Janet. The Fed should hike on the 16th, but in all probability, they won’t,” Sheperdson said in a research note sent to clients.
Be that as it may, one prominent economist pointed to declines in the length of the average work week and in the index of aggregate weekly hours contained in Friday's data as worrying developments.
In corporate news, London Stock Exchange was a little weaker after posting a 31% increase in full year profit and reiterating the case for a merger with Deutsche Boerse.
Shares in WPP rose after it posted strong 2015 results, although it sounded a cautious note over the outlook for the advertising industry.
Dutch digital security firm Gemalto surged after its full-year profit beat analysts’ expectations.
French hotel group Accor rallied after a spokeswoman for the company said it was not in talks to buy Carlson Rezidor Hotel Group.
Bookmaker William Hill was on the back foot after UBS downgraded the stock to ‘sell’ from ‘buy’, pointing to an increasingly competitive backdrop.
Asset manager Schroders slumped after Citigroup downgraded the stock to ‘neutral’ from ‘buy’.