By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets rose for a ninth straight day on Tuesday after a soft jobs report from the U.S. stoked expectations the Federal Reserve will maintain its aggressive easing program well into 2014.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -3.75% gained 0.5% to 320.97, marking the highest close since June 2008.
U.S. data showed 148,000 jobs were added to the economy in September, below the 185,000 expected by economists polled by MarketWatch. The jobless rate unexpectedly fell to 7.2% from 7.3% in August. The report was delayed due to the U.S. government shutdown.
September’s U.S. jobs report “likely pushes Fed tapering further into the future and it seems likely we now have to get to March before we see a meaningful improvement in growth and employment enough to push the Fed into tapering asset purchases,” Allan von Mehren, chief analyst at Danske Bank, wrote in a note.
“The soft job growth underscores that GDP growth has also disappointed by tracking just below 2% in [the third quarter]. The fourth quarter will likely fail to show any increase given the negative effects from the government shutdown and expected sentiment hit from the debt-ceiling woes,” he added.
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Among top performers in the pan-European index, Gjensidige Forsikring ASA /zigman2/quotes/207389580/delayed NO:GJF -2.70% jumped 8% in Oslo after the insurance firm posted a 6% rise in third-quarter earnings per share.
Shares of Reckitt Benckiser Group PLC rallied 5.2% in London after the consumer-goods company said it expects full-year revenue growth to be at least 6% and full-year margins to be maintained.
U.S. stocks traded higher on Wall Street.
With the highly anticipated U.S. jobs report out of the way, attention in Europe is now likely to turn to events and data releases in the region. On Wednesday, the European Central Bank will announce details on how it will conduct its upcoming asset quality review of the euro zone’s biggest banks.
“That will certainly be a key event to watch. We’ve argued in the past that the way the ECB runs this exercise will have implications for the broader economy,” said Timo del Carpio, European economist at RBC Capital Markets. “Having a robust supervisor in place is an important step toward implementing a banking union. It’s important in building confidence in the banking system and reducing the incentives for cross-border retrenchment of capital,” he added.
Later in the week, the preliminary purchasing managers’ indexes for the major euro-zone economies are out followed by the German Ifo survey on Friday. “The data we have at the end of this week will confirm or deny the general narrative about the recovery. We have had indications over the last few weeks that are consistent with a slow, but steady recovery,” del Carpio said.
France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -3.32% gained 0.4% to 4,295.43, closing at a five-year high.
Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -3.19% added 0.9% to 8,947.46, a record close.
BHP Billiton PLC /zigman2/quotes/208108397/composite BHP -3.27% /zigman2/quotes/201448516/delayed AU:BHP -1.01% climbed 4.1% in London after the miner raised its outlook for full-year iron-ore production, signaling confidence that China’s rapid industrialization will continue to lift demand for natural resources.
Shares of ARM Holdings PLC fell 3.4% even as the microchip designer posted a rise in third-quarter profit and said it has a record order backlog going into the final fiscal quarter.
Shares of Novartis AG /zigman2/quotes/203286410/delayed CH:NOVN -1.61% added 2% after the drug maker raised its full-year outlook for the second consecutive quarter after a generic version of its blockbuster blood-pressure drug was delayed.
Swedbank AB /zigman2/quotes/203208387/delayed SE:SWED.A -3.13% climbed 3.6% after the bank posted an increase in third-quarter profit, boosted by rising net interest-income. It also said there are signs that the global economy is improving.
Stora Enso Oyj /zigman2/quotes/201270972/delayed FI:STERV -3.86% dropped 3.5% after the pulp and paper firm said fourth-quarter sales and operational earnings will be lower than the levels seen in the same quarter last year.