European stocks closed higher Friday and nabbed a weekly gain, with a dive by the euro after a stronger-than-expected U.S. jobs report giving a boost to exporters.
After losing ground earlier in the session, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.46% rose 0.3% to end at 379.95. The index achieved a weekly rise of 1.2%.
Much of Friday’s gain for the Stoxx 600 came from German equities, which benefited from the euro’s slide to a six-month low against the dollar. Germany’s DAX /zigman2/quotes/210597999/delayed DX:DAX +0.46% jumped 0.9% to end at 10,988.03, with the index briefly trading above 11,000 for the first time since August.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0601% recently traded 1.3% lower at $1.0742 in the wake of news that the U.S. economy added 271,000 jobs in October, well above expectations. The euro late Thursday bought $1.0880.
The dollar drove higher on expectations that the U.S. Federal Reserve’s first interest-rate increase in nearly a decade could come as soon as next month. A weaker euro tends to make prices of European-made goods less expensive to purchase for overseas customers. The export-oriented German economy is the largest in Europe.
On the DAX, auto maker BMW /zigman2/quotes/209548467/delayed DE:BMW +2.04% shares drove up 3.5%, Daimler AG /zigman2/quotes/205332368/delayed DE:DAI +0.80% closed up 2.2% and HeidelbergCement AG /zigman2/quotes/202418791/delayed DE:HEI +0.19% also added 2.2%.
A “dovish” monetary policy stance from European Central Bank President Mario Draghi, “coupled with unexpected declines in German factory orders and industrial output, keeps open the possibility that the Federal Reserve and ECB move in opposite directions next month,” said currency analysts at Brown Brothers Harriman, led by Marc Chandler.
Luxury slump: But most luxury names within the consumer-goods sector on Friday lost ground. They were hit on the back of an update from Cie. Financière Richemont /zigman2/quotes/203783259/delayed CH:CFR +1.64% , whose brands include Cartier and Piaget. First-half profit and sales at Richemont, the world’s second-largest luxury group, each missed analyst expectations. Richemont /zigman2/quotes/203783259/delayed CH:CFR +1.64% dropped 5.7%.
Richemont noted that the key Hong Kong and Macau markets were still “extremely difficult,” although it saw growth in mainland China.
Shares of Swiss watchmaker Swatch Group Ltd. /zigman2/quotes/203516858/delayed CH:UHR -0.49% fell 4.3%, France’s LVMH Moët Hennessy Louis Vuitton SE /zigman2/quotes/201350549/delayed FR:MC +1.15% ended 2.7% lower and Christian Dior SE /zigman2/quotes/201058228/delayed FR:CDI +0.83% lost 1.9%. Britain’s Burberry Group PLC /zigman2/quotes/205386705/delayed UK:BRBY +1.17% /zigman2/quotes/203108786/delayed BURBY +0.81% was off 0.7%.
Weakness in the Chinese economy has been a source of pain throughout the year for luxury-goods makers, as well as for mining shares.
As well, the Bank of England on Thursday flagged concerns that China’s slowdown is rippling through emerging markets, and in turn, hurting growth prospects for the U.K. With the central bank downgrading its forecasts for growth and inflation, the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.1809% took a beating Thursday and extended losses on Friday, dropping 1% in recent trading. Sterling was buying $1.5069 compared with $1.5215 late Thursday.
In Paris, the CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.71% turned up by 0.1% to close at 4,984.15.
Movers: Sanofi SA /zigman2/quotes/206928357/delayed FR:SAN +1.38% shares fell 6.8% after the French drug maker warned it didn’t expect “any meaningful” profit growth over the next two years. Sanofi is struggling with growing pricing pressure in its key diabetes market.
Syngenta AG climbed 4.1% following a Wall Street Journal report that the company is discussing with DuPont Co. /zigman2/quotes/203606582/composite DD -0.18% a potential combination with DuPont’s agriculture division.
BHP Billiton PLC /zigman2/quotes/208108397/composite BHP +1.41% /zigman2/quotes/201448516/delayed AU:BHP -2.16% fell 5.7%, with investors worried about damage caused by a major dam burst to a Brazilian iron-ore operation BHP jointly owns.
AstraZeneca PLC /zigman2/quotes/203048482/delayed UK:AZN +1.50% /zigman2/quotes/200304487/composite AZN +0.93% closed down 0.5% after the drug maker agreed to pay $2.7 billion for Californian biotech ZS Pharma Inc.