By Jack Denton
European equities climbed higher on Friday, though some major indexes pared gains to end flat, as key U.S. economic data was released. Stock-market indexes across the region had been set to close out the trading week having eked out gains, after days of turbulence amid concerns over the more infectious variant of the coronavirus that causes COVID-19.
The pan-European Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.44% rose 0.26% while London’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.16% ended the day flat. In Paris, the CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.59% opened higher but fell just below flat and Frankfurt’s DAX /zigman2/quotes/210597999/delayed DX:DAX +0.23% climbed 0.3%. U.S. stock were higher, with Dow industrials /zigman2/quotes/210598065/realtime DJIA -0.18% up more than 100 points by midday, after the index rose 131 points on Thursday to close at 34,633.
The major European stock indexes have had a turbulent week, as the region has been shaken by mounting concerns over the more infectious delta variant of coronavirus, which has led to the imposition of new travel restrictions across the region. New restrictions include those from Spain, Portugal, and Malta on travelers from the U.K., where the variant is prevalent.
But analysts noted that stocks have taken it in their stride and were set to end the trading week even or slightly higher than on Monday, ahead of key U.S. jobs data.
“The next catalyst for investors to look forward to will be the U.S. jobs report today, which could shed some light on the state of the recovery as well as the Federal Reserve’s likely plans for monetary policy,” said Jim Reid, a strategist at Deutsche Bank.
Reid said that economists at the German bank expect a 700,000-plus gain for nonfarm payrolls, which measures the number of workers in the U.S. excluding those in agriculture and a select few other jobs. That should also help knock down the U.S. unemployment rate by one-tenth, Reid said, to a post-pandemic low of 5.7%.
“That would still leave the total level of nonfarm payrolls -6.9 million beneath its level in February 2020, so there’s still some way to travel before we get back to pre-COVID normality,” Reid added.
The share-price moves of Neles /zigman2/quotes/204331732/delayed FI:NELES +0.84% and Valmet /zigman2/quotes/202722086/delayed FI:VALMT +0.15% diverged significantly after the two Finnish industrial firms said that they have agreed to merge . Shares in Neles, which offers flow-control products such as valves used in the oil-and-gas-refinement process, rose near 9%, while shares in Valmet — which provides technology and automation systems to industry — dropped 6%.
Dutch semiconductor companies added buoyancy to European stocks, with ASML /zigman2/quotes/206208657/delayed NL:ASML +0.40% stock rising near 1.5% and shares in ASM International /zigman2/quotes/201180544/delayed NL:ASM +0.75% rising 2.5%. ASML, which supplies critical equipment to chip makers, got a boost as Micron Technology /zigman2/quotes/205710729/composite MU +1.10% said it would begin using its machines from 2024. Fellow industry supplier ASM announced that orders in the second quarter of the year were much higher than previously guided, expected to exceed €500 million ($591 million).
Shares in European airlines also rose, with Air France-KLM /zigman2/quotes/205396176/delayed FR:AF +1.81% , Lufthansa /zigman2/quotes/201210530/delayed XE:LHA +1.16% , Ryanair /zigman2/quotes/202851567/delayed UK:RYA +8.27% , Wizz Air /zigman2/quotes/210449062/delayed UK:WIZZ +4.99% , and easyJet /zigman2/quotes/202825892/delayed UK:EZJ +7.17% higher. Ryanair and Wizz Air released passenger data that analysts said were encouraging for a recovery in the sector, with Wizz Air filling nearly two-thirds of seats in June while Ryanair’s traffic almost tripled last month from May.
Inditex /zigman2/quotes/203681809/delayed ES:ITX +5.29% stock fell near 1%, after French prosecutors opened an investigation into the retail giant, which owns Zara, over suspected concealment of “crimes against humanity” linked to forced labor of minority Muslim Uyghurs in the Xinjiang region of China, Reuters reported . Prosecutors are also reportedly investigating three other retailers: Uniqlo France, SMCP, and Skechers. Shares in Japan’s Fast Retailing /zigman2/quotes/200663563/delayed JP:9983 -0.13% , which owns Uniqlo, fell near 1%.