(Sharecast News) - European shares managed a positive finish on Friday after an earlier rally took the Stoxx 600 to a fresh intraday high, as a weaker-than-expected US jobs report reduced expectations that the Federal Reserve will raise interest rates.
The pan-European Stoxx 600 rose 0.68% to 652.77.
Germany's DAX gained 0.78% to 25,779.31, France's CAC 40 advanced 0.39% to 8,508.07, and London's FTSE 100 edged up 0.25% to 10,679.03.
In commodities, Brent crude futures were last up 0.35% on ICE at $72.05 per barrel, while the NYMEX quote for West Texas Intermediate was broadly flat, up 0.01% at $68.70.
Axel Rudolph, chief technical analyst at IG, said both the Stoxx 50 and Stoxx 600 had followed Germany's DAX in hitting fresh record levels, with industrial, automotive and utility stocks leading the advance.
"European equities advanced on Friday amid the US 4th of July holiday, with Germany's DAX 40, and the broader Stoxx 50 and Stoxx 600 rising to fresh record highs, supported by stronger-than-expected Chinese and Spanish services PMI data and Thursday's softer US jobs report that eased fears of near-term Federal Reserve rate hikes," he said.
Rudolph said upbeat global sentiment had lifted technology, industrial, automotive and utility stocks, even as Italy's services sector grew slightly less than expected.
The US economy added just 57,000 jobs in June, well below the downwardly revised 129,000 recorded in May and short of forecasts for 110,000, according to the Bureau of Labor Statistics.
It was the weakest jobs gain in four months, while revisions cut a combined 74,000 roles from April and May totals.
Investors took the data as a sign that the Federal Reserve may hold off from further interest rate hikes.
Patrick Munnelly, market strategy partner at TickMill, said UK stocks had turned in a mixed performance, with investors remaining cautious after fresh data showed the British private sector still in contraction for a second month.
"The FTSE 100 lacked a clear direction," he said.
"The index was not under heavy pressure, but the tone was hesitant."
Euro area private sector activity stabilises
On the economic front, private sector activity across the eurozone stabilised in June, according to the final composite purchasing managers' index from S&P Global and Hamburg Commercial Bank.
The composite PMI rose to 50.0 from 48.5 in May, above the flash estimate of 49.5 and marking no change in activity after two months of declines.
The manufacturing PMI had already been confirmed at 51.4, while the services PMI was revised up to 49.4 from the initial estimate of 48.9.
Input cost inflation softened to its lowest rate since February, while private sector payrolls were broadly steady and business confidence reached a four-month high.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the easing downturn in services activity, alongside manufacturing growth, meant the wider eurozone economy had stabilised.
He said cooling inflationary pressures would likely reduce the odds of further near-term rate hikes by the European Central Bank by taking some heat out of more hawkish views among policymakers.
In the UK, the downturn across the services sector deepened in June.
The final S&P Global services PMI was revised to 48.8 from the flash estimate of 48.7, but remained below May's 49.3 and marked the weakest reading since January 2023.
S&P said firms cited weak domestic economic conditions as geopolitical uncertainty in the Middle East led clients to scale back risk appetite.
Consumer-facing firms were also hit by lower footfall during the late-June heatwave, although demand linked to the FIFA World Cup provided some offset.
Total new work across the services sector fell for a fourth consecutive month and at the sharpest pace since November 2022, while export orders declined again amid subdued demand from European clients.
Input prices rose at their slowest rate since March, helped by lower fuel costs.
UK firms meanwhile expect their own-price inflation to rise slightly over the next year, according to the Bank of England's latest Decision Maker Panel survey.
Prices were 3.8% higher year-on-year in the three months to June, unchanged from the three months to May, while expectations for own-price inflation over the coming year rose to 4.1% from 4.0%.
Businesses expect output price inflation to rise by 0.3 percentage points over the next 12 months.
CFOs' expectations for year-ahead consumer price inflation were unchanged at 3.7%, while three-year-ahead expectations rose to 2.9% from 2.8%.
Wage inflation cooled slightly, with wages up 4.1% over the past year compared with 4.2% in the May survey, although expectations for wage growth over the coming year increased to 3.5% from 3.4%.
The Bank said higher prices and lower profit margins remained the most common expected responses to the energy shock, although the expected impact on prices continued to ease.
Abivax jumps after share sale
In equity markets, Abivax rose 5.63% after the French biotech raised 767.1m in net proceeds from a share sale this week.
The offering was increased from its original 600m size, with proceeds set to fund development of its inflammatory bowel disease treatment obefazimod in the US, as well as ongoing research and development for ulcerative colitis and Crohn's disease treatments.
Reporting by Josh White for Sharecast.com.
26.16 (0.25%)
207.36
0.00