(Bloomberg) -- European stocks advanced on Friday after a surprisingly strong report on US employment encouraged investors that the economy was holding up just fine.
The Stoxx Europe 600 Index climbed 0.4% by the close. Banks and energy stocks gained the most. Autos rose 1.6% after the European Union voted to impose tariffs as high as 45% on electric vehicles from China.
Among individual stocks, DSV A/S jumped after the Danish freight-forwarding company sold €5 billion worth of new shares without resorting to a discount to finance its takeover of DB Schenker.
Despite Friday’s gain, Europe’s regional benchmark index posted a weekly decline of about 1.8%. The sentiment boost from China’s recent stimulus announcements is fading amid escalating tensions in the Middle East. Oil was headed for its biggest weekly increase in two years on fears that Israel may decide to strike Iranian petroleum facilities in retaliation for a missile assault on its territory.
Amid the geopolitical uncertainty, the brighter outlook on the US economy encouraged investors. Traders quickly pared their bets on how much the Federal Reserve will lower interest rates next month. The central bank delivered an outsized cut of half a percentage point in September to bolster growth.
US job growth last month topped all estimates, the unemployment rate unexpectedly declined and wage growth accelerated, Friday’s report showed.
“Today’s jobs figures suggest the Fed’s action is working well to support its full-employment mandate,” said Richard Flynn, managing director at Charles Schwab UK.
Softer hiring and a rise in the jobless rate earlier this year were major drivers behind the Fed’s decision to start its policy-easing campaign with the big cut last month.
For more on equity markets:
- Taxman Set to Deal Another Blow to French Firms: Taking Stock
- M&A Watch Europe: DSV Share Sale, FDJ Gets Kindred, Elis
- Bankers Rush to Get Deals Done as US Vote Nears: ECM Watch
- US Stock Futures Fall; Align Technology Falls
- Bringing Home the Bacon: The London Rush
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