Europe stock marts rebound on strong US jobs numbers

European stock markets closed sharply higher yesterday as better-than-expected US jobs data added to early gains made on a more positive view of the European Central Bank’s stand on the eurozone debt crisis. The ECB sparked a heavy global sell-off on Thursday when head Mario Draghi announced no immediate measures to bring down dangerously high borrowing costs for some eurozone states, disappointing markets primed for action. However, by yesterday, analyst comment on Draghi’s comments had turned more positive, suggesting that the ECB and eurozone governments were gradually putting in place the framework for a lasting solution to the debt crisis. News that the US economy created 163,000 jobs in July, compared with forecasts for just 100,000, then gave sentiment an additional boost, driving sharp gains by late afternoon. Combined, the two leads made for a strong rally, with Thursday’s losses more than recovered. In London, the benchmark FTSE 100 index of top companies up 2.21% at 5,787.28 points. In Frankfurt, the Dax 30 gained 3.93% at 6,865.66 points and in Paris the CAC 40 jumped 4.38% to 3,374.19 points. Among other European markets, Madrid put on 6% and Milan soared 6.34% even though concerns remain that Spain and Italy may eventually need bailouts. The European single currency jumped sharply to $1.2391 from $1.2178 in New York late Thursday. On Wall Street, the Dow Jones Industrial Average was up 1.82% at around 1600 GMT and the tech-rich Nasdaq put on 2.11%. Investors welcomed the improvement in the US jobs data in July which showed the strongest gain since February. “These are good data. Not great, but good,” said Dick Green at Briefing.com. “With regard to the economic outlook, today’s report clearly supports our view that the US economy should expand at a faster pace in the second half of the year than it did in the first half,” UniCredit analysts said. He said many had been hoping for follow up action after Draghi last week said the ECB would do whatever was needed to save the euro, but when no new measures were announced the markets reversed sharply. In Asian trade earlier yesterday, stock markets closed mostly down, hit additionally by downbeat results from two of Japan’s biggest electronics firms Sharp and Sony. Tokyo fell 1.13%, Seoul shed 1.11% and Sydney lost 1.12%. Hong Kong slipped 0.12%. Shanghai rose 1.02% after China’s securities regulator said it would cut transaction fees on equity trading by 20% from September 1. Indian stocks dropped for the second day yesterday, paring a weekly advance. The BSE India Sensitive Index slid 0.2% to 17,197.93 at the close, paring this week’s rally to 2.1%. The rupee dropped 0.7% to 55.7550 per dollar this week, the most since the five days through June 22, according to data compiled by Bloomberg. From gulf times.