European equity markets surged on Friday with CAC, DAX, IBEX and the London benchmark gaining more than 0.5%, while the euro rebounded against the US dollar, rising above the 1.365 area.
On the macroeconomic front, the US employment report was fairly modest showing 74,000 people were added to payrolls in December 2013, missing analysts’ expectations of 197,000. However, the US unemployment rate fell to 6.7% in December compared to 7% in November, 2013. The fairly tepid US employment figures surprised investors and limited any possible strong gains across the equity and commodity markets, especially after the recent robust US economic data in the last few trading sessions.
Chinese imports accelerated to their highest level since July 2013, verifying the view that China’s domestic demand has remained on track to support economic growth. Chinese imports rose by 8.3% y/y in December, beating analysts’ expectations of 5% growth. The robust Chinese economic data offered upside momentum to base prices in today’s trading session.
In London, energy stocks added the most points and helped the benchmark index to end on the positive territory. Tullow Oil surged by 7.6% amid rumours that Norway’s Statoil may be eyeing the company for a possible takeover, according to a Thomson Reuters report. Royal Dutch Shell, AMEC and Petrofac gained between 1.3 and 2.1%.
Mining stocks posted strong gains following a strong rebound in precious and base metals prices. Randgold, Glencore, Mondi and Anglo American gained between 1.88% and 2.94%.