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European stocks boosted by oil sector; US payrolls disappoint

Published 2024-11-01, 04:06 a/m
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Investing.com - European stock markets rose Friday, helped by gains in the oil sector, while investors digested a disappointing US jobs report ahead of next week’s presidential election and Federal Reserve meeting. 

At 10:25 ET (14:25 GMT), the DAX index in Germany traded 0.9% higher, the CAC 40 in France rose 0.7% and the FTSE 100 in the U.K. gained 0.8%.

Oil sector to the fore

The European earnings season has taken a break Friday after a busy week.

However, gains have been helped by the strong rise in oil prices [see below], with the energy sector gaining over 1% following reports that Iran was preparing a retaliatory strike on Israel from Iraq in the coming days.

BP (LON:BP), Shell (LON:SHEL), Eni (BIT:ENI) and TotalEnergies (EPA:TTEF) all gained over 1%.

Additionally, Reckitt Benckiser (LON:RKT) stock surged over 7% after the consumer goods group was cleared of liability in the latest preterm formula case.

Siemens (ETR:SIEGn) stock rose over 1% after managing board member Cedrik Neike said the German conglomerate has the financial muscle for further software acquisitions after its $10.6 billion purchase of U.S. industrial software company Altair.

A lot of the attention, however, was on Wall Street after Apple (NASDAQ:AAPL) reported a modest growth outlook, even as early iPhone 16 sales grew faster than iPhone 15 sales, while Amazon (NASDAQ:AMZN) posted third-quarter profit and sales above Wall Street estimates. 

Nonfarm payrolls disappoint

The European economic data slate was largely empty Friday, forcing investors to focus, almost exclusively, on the influential monthly payrolls release in the US.

The US economy added far fewer jobs than anticipated in an October, with nonfarm payrolls rising by 12,000 during the month, a drop from a downwardly revised 223,000 in September. Economists had expected a reading of 106,000.

However, the release was impacted by devastating recent hurricanes and ongoing labor actions, and thus is unlikely to force the Federal Reserve to deviate from what is widely expected to be a cut by a quarter-point next week.

Also weighing on activity is the proximity to next week's US presidential election, the result of which could have ramifications for the European corporate sector.

Candidates Donald Trump and Kamala Harris appear to be running neck and neck according to most polls, but investors appear to have been trading on expectations that a Trump win could bring inflationary policies.

Crude prices rise on raised tensions 

Oil prices rose Friday, paring some of the week’s losses, on raised geopolitical tensions in the Middle East following reports that Iran was preparing a retaliatory strike on Israel.

By 10:25 ET, the Brent contract climbed 1.8% to $74.12 per barrel, while U.S. crude futures (WTI) traded 2% higher at $70.67 per barrel.

Iran is preparing to attack Israel from Iraqi territory in the coming days, Axios reported on Thursday, citing Israeli intelligence, in response to Israel's strike against Iran on Oct. 26.

Also helping the tone was the release of data in China, which showed manufacturing activity swung back to growth in October, according to a  private-sector survey, echoing the official survey released earlier in the week. 

Both contracts are still set to fall around 2% this week, after slumping more than 6% on Monday on the reduced risk of a wider Middle East conflict.

 

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