Europe midday: Shares hold gains ahead of US jobs report
European shares opened higher on Friday as a merger between Finnish industrial firms Valmet and Neles boosted sentiment.
The pan-European STOXX 600 index rose 0.40%. Investors were also awaiting a US monthly jobs report later in the day with a consensus forecast of 690,000 jobs to have been added in June, compared to a lower-than-expected figure of 559,000 in May.
"Today's data will shed some light on the health of the labour market recovery and a possible timeline for the Fed's plans to tighten monetary policy," said OANDA analyst Sophie Griffiths.
"The leading indicators heading into the reading are not that encouraging. The employment component of the ISM manufacturing PMI declined from 50.9 last month to 49.9. The ADP private payroll figure was also down from 886k last month to 692k."
"However, the four-week moving average unemployment claims were slightly more upbeat, dropping to 393k from 428k. Even so, two of the three lead indicators are softer, which doesn’t bode well for today’s release."
Oil prices moved north of $75 a barrel after the Organisation of the Petroleum Exporting Countries (OPEC) failed to agree a deal on output overnight as the United Arab Emirates blocked a deal to add back 2 million barrels per day in the second half of the year.
"The meeting was postponed amid bitter infighting, casting doubt on whether a deal to boost production can be agreed upon and the price of oil contained. If no deal is agreed, the oil cartel could fall back onto existing terms, which see output unchanged until April 2022, squeezing an already very tight market," Griffiths said.
In equity news, Finnish industrial firms Valmet and Neles said they have agreed to merge, forming a combined company that will provide enhanced growth opportunities and benefit from broader revenue and cost synergies.
Neles shares topped the Stoxx on the news, rising 7.3% while Valmet was down 5.74%.
UK housebuilders Bellway and Barratt were gainers after a ‘buy’ recommendation from broker Jefferies.
Shares in Danish endoscopy, diagnostic and life-supporting equipment maker Ambu fell to the bottom of the Stoxx, down 11.8%, after the firm lowered revenue growth and earnings guidance due to a slower recovery of elective procedures than expected Covid pandemic from the and shipment delays impacting its core portfolio caused by global container freight market congestion.