European Markets Rebounded On Strong U.S. Jobs Data

(RTTNews) - The majority of the European markets ended Friday's session in the green for the first time this week. The markets rebounded from 5 days of losses after the U.S. jobs report for November topped expectations. U.S. job growth was stronger than expected and the unemployment rate fell to a 5-year low.

The Bundesbank on Friday lifted its growth projections for Germany and said the economy has picked up momentum largely supported by private consumption. Releasing its new semi-annual projections, the central bank said it now expects the gross domestic product to grow 0.5 percent this year, up from the 0.3 percent growth predicted in June.

Growth is seen at 1.7 percent in 2014, better than the 1.5 percent expansion projected earlier. The economy is forecast to grow 2 percent in 2015. There is no need for further fiscal centralization in the euro area beyond the banking union, European Central Bank Executive Board member Benoit Coeure said Friday.

"The euro area also needs solidarity mechanisms for extreme events that are out of reach of national policies- that is the role of the European Stability Mechanism," he said in Frankfurt.

The Bank of England is set to maintain its policy interest rate at the current level all through 2014 despite the more optimistic view of the growth outlook and expectations that the unemployment rate will get down to the target early in 2015, and possibly even late next year, IHS Global Insight Chief UK and European Economist Howard Archer said.

According to the economist, the central bank will likely start raising interest rates only from the third quarter of 2015. However, the bank is expected to refrain from engaging in any further Quantitative Easing over the coming months, barring a major relapse by the economy.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.97 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.88 percent.

The DAX of Germany climbed by 0.96 percent and the CAC 40 of France advanced by 0.72 percent. The FTSE 100 of the U.K. rose by 0.83 percent and the SMI of Switzerland gained 0.50 percent.

In Frankfurt, Deutsche Telekom rose by 1.81 percent. Exane BNP upgraded its rating on the stock to "Outperform" from "Neutral."

Hochtief dropped by 2.73 percent, after both Commerzbank and UBS reduced their ratings on the stock.

In Paris, Total increased by 0.85 percent. The oil giant agreed to buy a 61.3 percent interest in Petroleum Retention License 15, which contains the Elk-Antelope gas fields in the Gulf Province of Papua New Guinea, for up to $3.6 billion. Additionally, HSBC started Total with an ''Overweight'' rating.

Barclays reinitiated Vivendi with an ''Equalweight'' rating. The stock finished higher by 0.28 percent.

STMicroelectronics sank by 1.74 percent, after it was removed from the CAC 40. Its replacement in the index, Alcatel-Lucent, rose by 0.76 percent.

In London, Vodafone climbed by 2.12 percent. Berenberg upgraded its rating on the stock to "Buy" from "Hold." Exane BNP also upgraded its rating on the stock to "Neutral" from "Underperform."

Wm. Morrison Supermarkets rose by 0.93 percent, after Citigroup upgraded it to "Neutral" from "Sell."

HSBC initiated coverage on Royal Dutch Shell, BP and BG Group with "Overweight" ratings. Royal Dutch Shell increased by 2.58 percent. BP added 0.48 percent and BG Group gained 1.07 percent.

Petrofac advanced by 3.65 percent, following a positive broker recommendation.

Berkeley surged by 11.17 percent, after it reported impressive first-half earnings.

Domino's Pizza Group declined by 9.35 percent, after it announced the resignation of its chief executive.

Givaudan fell by 2.10 percent in Zurich. Nestle said it is selling its entire stake in the fragrance and flavor maker.

Dutch mail firm PostNL NV said it plans to sell about 15 percent of the outstanding share capital of TNT Express. TNT Express dropped by 4.72 percent and PostNL gained 1.93 percent in Amsterdam.

Societe General downgraded Generali to ''Sell'' from ''Hold.'' The stock rose by 0.55 percent in Milan.

Germany's factory orders fell more than expected in October driven by broad-based declines in domestic and foreign orders, official data showed Friday. Factory orders were down 2.2 percent from September, bigger than the expected fall of 1 percent and reversed the 3.1 percent increase seen in September.

The French trade deficit narrowed to EUR 4.69 billion in October due to a decline in imports, customs office reported Friday. Economists were expecting the shortfall to narrow to EUR 5.5 billion from September's revised EUR 5.64 billion deficit.

U.K. house prices increased for the tenth consecutive month in November as strong demand outpaced the supply of properties coming for sale, Lloyds Banking Group's housing division Halifax said Friday. House prices increased 1.1 percent month-on-month in November, faster than the 0.8 percent rise forecast by economists.

Britons' inflation expectations increased in November and the proportion of respondents expecting an interest rate hike in the next 12 months increased from August, a closely watched survey showed Friday. The median inflation expectations for the coming year rose to 3.6 percent from 3.2 percent in August, the Bank of England/GfK NOP Inflation Attitudes survey said.

In another upbeat sign for the U.S. labor market, the Labor Department released a report on Friday showing that stronger than expected job growth in the month of November pushed the unemployment rate down to a five-year low.

The report showed that non-farm payroll employment rose by 203,000 jobs in November following a revised increase of 200,000 jobs in October. Economists had been expecting employment to increase by about 180,000 jobs compared to the addition of 204,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate pulled back to 7.0 percent in November from 7.3 percent in October. The unemployment rate had been expected to dip to 7.2 percent.

While the Commerce Department released a report on Friday showing an unexpected drop in U.S. personal income in the month of October, the report also showed continued growth in personal spending.

The report said personal income edged down by 0.1 percent in October after rising by 0.5 percent in each of the two previous months. The drop surprised economists, who had expected income to increase by 0.3 percent.

Meanwhile, the Commerce Department said personal spending rose by 0.3 percent in October following a 0.2 percent increase in September. The increase in spending matched economist estimates.

Consumer sentiment in the U.S. has improved by much more than anticipated in the month of December, according to a report released by Thomson Reuters and the University of Michigan on Friday.

The report said the preliminary reading on the consumer sentiment index for December jumped to 82.5 from the final November reading of 75.1. Economists had been expecting the index to edge up to 75.5.