Europe open: Stoxx rallies after weak US jobs report
European stocks made at strong start to the week at the open on Monday, despite a sluggish session in Asia overnight after a weak US jobs report last Friday.
The pan-European Stoxx 600 index was up 0.66% at 509 with all major regional bourses in the green.
US non-farm payrolls rose by 142,000, missing the 163,000 forecast by economists.
“More recent economic data has also shown signs of weakness, prompting recessionary fears and leading to a reduction in risk appetite. However, the non-farms number was neither conclusive nor enough to move the dial, such that the consensus is still skewed to a rate reduction of 0.25% next week from the Federal Reserve, as opposed to a more aggressive 0.5% cut,” said Interactive Investor head of markets Richard Hunter.
“Even so, sentiment has weakened ahead of the rate decision and mega cap technology stocks bore the brunt of the latest exodus. The Nasdaq fell by 2.6% and the S&P500 by 1.7% on Friday, with the Magnificent Seven at the eye of the storm with drops of between 3% and 4% for the likes of Amazon, Alphabet, Meta Platforms and Nvidia.”
“The next test comes on Wednesday this week with the release of the consumer price index, where headline inflation is expected to have fallen from 2.9% to 2.6% which, all things being equal, should cement any Fed decision to ease monetary policy.”
In equity news, gambling group Entain surged on a positive trading update after it said online net gaming revenue growth during the second half to date has been ahead of its expectations.
Computacenter fell as it released interim earnings.
Shares in luxury goods makers Kering and Burberry were lower fell after a downgrade to ‘underweight’ from ‘equalweight’ at Barclays, which cited structural brand weakness in China.
Reporting by Frank Prenesti for Sharecast.com