4:00 PM Frankfurt – European markets gained more than 1% on the back of better than expected U.S. employment data. European Commission lowered its economic outlook for the euro zone and European Union economies and the region is expected to shrink economies for the second year in a row.
European markets advanced after the U.S. jobless rate fell and the new job additions in April were ahead of expectation.
The European Commission in its latest estimate lowered its economic outlook after the economy shrank 0.6% in 2012.
The commission said economy of the 17-nations is expected to shrink 0.4% this year from the previous estimate of 0.3% decline in February.
The commission also lowered its estimate for German economic growth to 0.4% from the previous estimate of 0.5%. Spanish economy is expected to shrink 6.5% from the previous outlook of 1.5% decline.
Across the wider region of 27-nation European Union, GDP is expected to shrink 0.1% from the earlier estimate of an increase of 0.1%.
In London trading, FTSE 100 index increased 1% to 6,527 and in Frankfurt the DAX index gained 1.3% to 8,065.
In Paris trading, CAC 40 index added 1.1% to 3,900.
U.S. payrolls in April increased 1.65,000 and jobless rate fell to 7.5%, according to the data released by the Labor Department. Economists had anticipated an increase between 140,000 and 145,000.
The April month job additions are near the monthly 168,000 jobs added a month in the first quarter but below 209,000 in the fourth quarter of 2012.
Stocks in Review
Adidas AG soared 5.5% to 83.84 euros after first-quarter net income increased to 308 million euros and gross margins expanded.
BNP Paribas SA increased 1.4% to 43.55 euros after the largest bank in France reported net income declined to 1.58 billion euros from 2.87 billion euros a year ago quarter.
The bank said it plans to increase its investment in Asia and cut expenses by 2 billion euros by 2015.
The bank also said its core Tier 1 capital ratio under the fully implements Basel III rules reached 10% at the end of March up from 9.9% in December.
Hugo Boss AG declined 5.5% to 86 euros after its majority stake holder said it plans to sell 7 million shares or 10%, at a price range between 87.50 euros and 88.50 euro a share.
Imagination Technologies Group Plc declined 3% to 306 pence and extended losses for the second day after the UK based chip maker reported yesterday lower than expected full-year results on the delays in closing sales agreements.
RBS, the near bankrupt lender now controlled by the UK government, declined 4% to 295 pence despite the bank reporting group operating profit of 829 million pounds.
Vallourec surged 10% to 39.41 euros after the maker of steel pipes for energy industry said first-quarter earnings before interest, taxes and amortization totaled to 191 million euros.
Veolia Environnment SA added 0.5% to 10.45 euros after the largest European water company lifted its target to cut costs by 750 million euros from 470 million euros.