United States

European Stocks Close Higher as Central Bank Tightening Fears Cool

Getty Images
  • U.S. nonfarm payrolls increased by 235,000 in August, the Labor Department said Friday. Economists surveyed by Dow Jones were expecting 720,000 jobs.
  • Federal Reserve Chairman Jerome Powell has emphasized the need for stronger jobs data before the central bank would start to unwind its massive bond-buying program.

LONDON — European stocks closed higher on Monday after U.S. jobs data indicated the Federal Reserve may have to keep monetary policy loose for longer, while speculation has risen over more stimulus in Japan and China.

The pan-European Stoxx 600 provisionally closed up by 0.7%, with tech stocks adding 1.6% to lead gains as most sectors and major bourses entered positive territory.

Stateside, the Dow Jones Industrial Average retreated on Friday and the S&P 500 slipped from a record high after the U.S. August jobs report came in short of expectations, showing the impact of the delta-fueled Covid resurgence.

Nonfarm payrolls increased by 235,000 in August, the Labor Department said Friday. Economists surveyed by Dow Jones were expecting 720,000 jobs.

The report marked a significant slowdown from July's revised number of 1.053 million and comes as the delta variant of Covid-19 has led to health restrictions being put back in place in some states and cities.

Federal Reserve Chairman Jerome Powell has emphasized the need for stronger jobs data before the central bank would start to unwind its massive bond-buying program, and the disappointing report could change expectations about when the Fed will start its tapering process.

The European Central Bank is due to meet this week for its latest policy decision, however analysts expect the bank will wait until December to announce the reduction of its Covid-related stimulus.

Asia-Pacific stocks were mostly higher on Monday. Japanese stocks were the biggest gainers regionally for a second successive session after Japanese Prime Minister Yoshihide Suga said he will not be running in the upcoming leadership election.

Investors hope a new prime minister may bring further fiscal spending, while speculation has also begun in China that more fiscal and monetary stimulus may be on the horizon as the recovery slows.

U.S. markets are closed on Monday for the Labor Day holiday.

In terms of individual share price movement, Germany's Teamviewer added 3.4% to lead the Stoxx 600, while French engineering group Spie fell 4.6% to the bottom of the index after submitting an offer to buy Engie's services unit.

Meanwhile, Britain's Dechra Pharmaceuticals fell 3.9% after its full-year results.

Enjoyed this article?
For exclusive stock picks, investment ideas and CNBC global livestream
Sign up for CNBC Pro
Start your free trial now

- CNBC's Ryan Browne, Eustance Huang, Jesse Pound and Maggie Fitzgerald contributed reporting to this story.

Copyright CNBCs - CNBC
Contact Us