Europe close: Stocks jump after US jobs data for August

European stocks finished the week with sharp gains as investors took the latest US jobs data to mean that an interest rate hike by the US central bank, in September, was now off the table, although not all economists agreed.

The benchmark Stoxx Europe 600 index snapped higher by 1.97%, Germany’s DAX rose 1.42% and France’s CAC 40 gained 2.31%.

Oil prices also advanced after Russian president Vladimir Putin called for an agreement between OPEC and non-OPEC members to freeze their output at current levels.

West Texas Intermediate finished up 2.99% at $44.49 a barrel and Brent crude was 3.1% firmer at $46.89.

US non-farm payrolls increased by 151,000 in August, less than 180,000 gain forecast by economists, together with weaker than expected wage growth and a fall in the length of the average work week.

Today’s US jobs report chewed up and spat out the idea of a September rate rise, in the process throwing away the increasingly hawkish market expectations that Fed members have nurtured over the past two weeks,” said IG market analyst Joshua Mahony.

“The post-Brexit period has been characterised by a degree of glee that monetary policy will be easy for the time, with only the increasingly hawkish backdrop cast by the FOMC undermining the outlook. That shadow cast by the threat of a US rate hike has been pushed aside for now, giving stock markets the ability to push onwards in response to an easy global monetary policy framework.”

On the company front, French hotels group Accor was on the front foot after Barclays lifted the stock to ‘overweight’ from ‘equalweight’.

Transport operator Go-Ahead Group rallied after posting stronger-than-expected annual profits in the rail division.

On the downside, German e-commerce investor Rocket Internet slumped after it reported a first-half consolidated loss of €617m.

Shares in SBM Offshore sank after the oil-services provider said prosecutors in Brazil have rejected a leniency agreement it reached with Brazilian authorities.

Elsewhere, Segro was under the cosh after the property developer announced plans to raise £340m in a placing to fund the development of new projects.

Retirement housebuilder McCarthy & Stone fell sharply after it reported a rise in revenue in the year to the end of August but said there has been evidence of some weakness in the secondary housing market since its update at the end of June.

On the macroeconomic front, figures from Eurostat showed producer prices in the eurozone ticked just a touch higher in July, marking their lowest monthly reading since April.

Producer prices were up 0.1% from June, in line with economists’ expectations and down from a 0.8% increase in June.

On the year, producer prices fell 2.8%, which was slightly less steep than the 2.9% drop expected and the 3.1% decline the month before.

Prices of non-durable consumer goods rose 0.3%, while prices of intermediate goods nudged up 0.1%. In the energy sector, prices fell 0.4%.

In the EU-28 group of nations, producer prices were also up 0.1% on the month and down 2.5% on the year.