Nov 4 (Reuters) – European stocks rallied on Friday after U.S. jobs data supported bets that the Federal Reserve would make lower rate hikes, hoping to ease COVID-19 restrictions in China, which would boost mining and luxury stocks.
The STOXX 600 (.STOXX) closed 1.8% higher, with Basic Resources (.SXPP), Personal & Household Goods (.SXQP) and Automakers (.SXAP) leading a broad rally.
Thanks to a much better-than-expected earnings season and hopes that central banks will ease their pace of monetary policy tightening, the benchmark index scored its fourth straight weekly gain with a 1.5% rise.
Major Wall Street indexes were flat, with slowing US job growth and a rising unemployment rate suggesting easing labor market conditions, supporting hopes of a shift to higher lower rates from December.
“We are confident that the Fed will continue its hike cycle, but not with the giant hikes we have seen in recent meetings,” said Teeuwe Mevissen, senior market economist at Rabobank.
Additionally, China is expected to make substantial changes to its “zero momentum” COVID-19 policy in the coming months and further shorten quarantine requirements for inbound travelers.
Luxury giants including LVMH (LVMH.PA), Kering (PRTP.PA), Pernod Ricard (PERP.PA) and Hermes International (HRMS.PA), which have large exposure to China, climbed between 3.7 % and 7.1%.
Miners (.SXPP) rose 5.3% to post their best day in nearly four months, as metal prices surged on speculation of easing COVID-19 restrictions in the major consumer of metals in China.
The Euro STOXX volatility index (.V2TX) fell to an 11-week low, reflecting easing investor anxiety.
Meanwhile, the data so far indicates that the Eurozone is heading into a winter recession. Eurozone business activity contracted last month at the fastest pace since the end of 2020, a survey showed, as high inflation and fears of a deepening energy crisis swept away. hit the request.
Among other stocks, Adidas (ADSGn.DE) jumped 21.4% to top the STOXX 600 after German managers’ magazine reported that outgoing Puma (PUMG.DE) chief executive Bjorn Gulden, should become the new leader of Adidas.
Manufacturer Andritz (ANDR.VI) jumped 10.7% as its quarterly sales and profit rose significantly.
Societe Generale (SOGN.PA) jumped 2.6% after posting better-than-expected net profit, while shares of Monte dei Paschi di Siena (BMPS.MI) plunged 12.0% after the bank made an investment of 2.5 billion euros ($2.4 billion). ) increase in capital.
Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Editing by Subhranshu Sahu, Vinay Dwivedi and Elaine Hardcastle
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