European Markets Close Higher On Economic Optimism

European markets closed higher on Friday as continued optimism about global economic recovery helped underpin sentiment.

Data showing a jump in U.S. non-farm payroll employment in the month of May and a drop in unemployment aided sentiment. However, the less than expected increase in addition of jobs limited markets’ upside.

However, the smaller than expected increase in U.S. non-farm payroll employment has raised hopes that the Fed will not tighten monetary policy anytime soon.

The pan European Stoxx 600 climbed 0.39%. Germany’s DAX gained 0.39%, while the U.K.’s FTSE and France’s CAC 40 edged up 0.07% and 0.12%, respectively. Switzerland’s SMI advanced 0.52%.

Among other markets in Europe, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Netherlands, Norway, Portugal and Turkey closed higher.

Ireland and Spain ended weak, while Austria, Poland, Russia and Sweden closed flat.

In the UK market, Ocado Group, Renishaw, Entain, Halma, Just Eat Takeaway, Flutter Entertainment, Aveva Group, Anglo American Plc, Next, Scottish Mortgage and Johnson Matthey gained 1.5 to 3%.

Glencore, AstraZeneca, Antofagasta, Reckitt Benckiser, Whitbread, Admiral Group and Fresnillo also ended notably higher.

On the other hand, Rolls-Royce Holdings, Associated British Foods, Pershing Square Holdings, Bunzl, Standard Chartered, Sainsbury (J), BP, Barclays Group, Lloyds Banking, HSBC Holdings and Natwest Group lost 1 to 2.2%.

In France, Technip shares moved up more than 4%. Capgemini, STMicroElectronics, Dassault Systemes, Legrand, Saint Gobain and LOreal gained 0.8 to 1.5%.

Air France-KLM, Renault, Safran, Unibail Rodamco and Societe Generale ended notably lower.

Vivendi shares edged down marginally after hedge-fund billionaire William Ackman’s special-purpose acquisition company, Pershing Square Tontine Holdings Ltd. confirmed that it is in discussions with the French media giant to acquire 10% of the outstanding ordinary shares of Universal Music Group B.V. or “UMG” for about $4 billion, representing an enterprise value of 35 billion euros for UMG.

In the German market, Merck, Vonovia, SAP, Beiersdorf, Fresenius Medicare and Infineon Technologies closed higher, while MTU Aero Engines, Deutsche Bank and HeidelbergCement closed notably lower.

In economic news, Eurostat data showed that Eurozone retail sales dropped 3.1% in April on a sequential basis, compared with the 1% decline expected by economists.

Germany’s construction Purchasing Managers’ Index fell to 44.5 in May from 46.2 in the previous month, survey results from IHS Markit showed. This was the lowest reading since February, when the sector was impacted by a bout of severe wintry weather.

The Chartered Institute of Procurement & Supply construction Purchasing Managers’ Index for U.K. rose to 64.2 in May from 61.6 in April.

The UK construction sector expanded for the fourth straight month in May and suggested the strongest output growth for just under seven years, survey results published by IHS Markit showed.

The Chartered Institute of Procurement & Supply construction Purchasing Managers’ Index rose to 64.2 in May from 61.6 in April.

Meanwhile, the U.S. Labor Department’s report showed non-farm payroll employment jumped by 559,000 jobs in May after climbing by an upwardly revised 278,000 jobs in April. Economists had expected employment to surge by 650,000 jobs compared to the addition of 266,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate fell to 5.8% in May from 6.1% in April, while economists had expected the unemployment rate to dip to 5.9%.