Europe: Equities gain for second week on jobs data and trade hopes

EUROPEAN shares rose for a second straight week, buoyed by robust US employment figures and diminishing concerns over trade friction that had previously rattled investor confidence.

The pan-European Stoxx 600 rose 0.32 per cent to 553.64 on Friday, and logged a 0.6 per cent gain for the week.

The United States’ better-than-expected jobs report relieved anxieties regarding the US labour market’s resilience, likely prompting traders to reassess how President Donald Trump’s trade policies might impact employment trends.

“The data fuelled optimism that the US jobs market, and so the US economy, is weathering the Trump tariff shock better than expected,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Market sentiment drew additional support from signs of easing in the US-China trade relationship following Thursday’s telephone conversation between Trump and Chinese President Xi Jinping.

Still, the market was also reminded this week of protectionist fervour, as the White House’s doubled tariffs on steel and aluminum imports took effect.

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The automotive sector, particularly exposed to these metal duties, bore the brunt, shedding 1.8 per cent over the week.

German Chancellor Friedrich Merz indicated he would pursue a deal for duty-free US car imports into Europe in exchange for equivalent tariff waivers on European exports to the United States.

Other bourses such as Germany’s DAX and France’s also recorded a second straight week of gains, while and Spain’s IBEX logged its eight consecutive week of advances - its longest in nearly four months.

The European Central Bank’s widely anticipated interest rate cut was overshadowed by President Christine Lagarde’s hawkish signals suggesting the monetary easing cycle may be approaching its conclusion. The stance prompted traders to dial back expectations for further rate reductions.

Markets are also monitoring whether the public spat between Trump and Tesla CEO Elon Musk could spill over into broader markets.

“Comments from Musk yesterday about Trump tariffs, putting the US in recession in the second half of this year combined with weak data this week is causing investors to sit out for the time-being,” said Fiona Cincotta, senior market analyst at City Index.

On Friday, the financial sector emerged as the standout performer, propelled by UBS, which rose 3.8 per cent after Swiss authorities proposed more stringent rules that could require an additional US$26 billion in core capital reserves for the banking giant.

Among other stocks, Dassault Systemes fell 1.2 per cent after the French software company extended the target period of its medium-term earnings per share forecast by one year.

Renk fell 6.2 per cent, placing it among the worst performers on the Stoxx 600, after Exane BNP Paribas downgraded the stock to “underperform” from “neutral”.

On the macroeconomic front, German exports and industrial production contracted more severely than anticipated in April, as US demand faltered following months of accelerated purchasing activity driven by tariff anticipation.

Across the Channel, British housing prices experienced a steeper-than-expected decline in May. REUTERS