European stocks rise despite poor US job data
Data from the US Labor Department also showed that the jobless rated dropped by 0.3 percent.
LONDON (AFP) - European stocks rose after disappointing data showed that the United States added only 74,000 net jobs during December, and the euro climbed as investors saw the US figures as a sign stimulus tapering would be delayed.
London s benchmark FTSE 100 index climbed 0.83 percent to 6,746.90 points in afternoon trading.
Frankfurt s DAX 30 grew 0.50 percent to 9,469.02 points and the CAC 40 in Paris also gained 0.50 percent to 4,246.25 points.
Milan was up 0.30 percent and Madrid climbed 0.46 percent.
Data from the US Labor Department also showed that the jobless rated dropped by 0.3 percentage points for the second month in a row, to 6.7 percent.
Analysts noted out that much of the drop was due to more people dropping out of the workforce, and that the US labour participation rate had now hit a 30-year low of 62.8 percent.
The job creation figure, watched more closely as a sign of the health of the economy, was far less than the 197,000 analysts expected, and well below the trend for the past year.
CMC Capital Markets analyst Michael Hewson called the non-farm payrolls data a "shock" and that the data showed the US economy added fewer jobs in 2013 than in 2012 despite the US Federal Reserve pumping $85 billion per month into the economy.
The Fed decided last month to cut the amount of its monthly bond purchases by $10 billion beginning in January, and analysts were eagerly awaiting the jobs numbers as they will likely influence whether further cuts or "tapering" follow swiftly.
"What this does mean is that we probably won t see any further tapering until March," said Hewson.
Robert Wood at Berenberg Bank noted that the unemployment rate is now close to the 6.5 percent level that the Fed has set before it will consider raising interest rates from their record low level.
While the Fed has signalled it will not automatically raise its key rate from from 0 to 0.25 percent even when the jobless rate hits 6.5 percent, the low labour participation rate may encourage central bankers to look at structural reasons behind unemployment, he said.
This raises "the risks of an earlier rate hike than previously assumed," he said. The jobs data helped US stocks opened higher on Friday.
Five minutes into trade, the Dow Jones Industrial Average rose 0.08 percent to 16,457.54 points.
The broadly based S&P 500 added 0.11 percent to 1,840.22 points, while the tech-rich Nasdaq Composite Index increased 0.27 percent to 4,167.42.
Asian stock markets were mixed on Friday following a weak lead from Wall Street overnight.
In foreign exchange trading, the European single currency rose to $1.3638 from $1.3606 late on Thursday in New York, when the euro rebounded from five-week lows.
The euro climbed to 82.84 British pence from 82.54 pence Thursday. The British pound slid to $1.6466 from $1.6482.
Gold increased to $1,232.50 an ounce from $1,226 Thursday on the London Bullion Market.
