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European stocks rebound before US jobs data

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European stocks rebound before US jobs data

The European single currency jumped to $1.2285 from $1.2178 late on Thursday in New York

London (AFP) – Europe’s stock markets rebounded strongly Friday ahead of US jobs data and after sharp losses the previous day on the European Central Bank’s lack of new initiatives to tackle the eurozone debt crisis.

London’s benchmark FTSE 100 index of top companies jumped 1.39 percent to 5,740.49 points approaching midday in the British capital, as the banking sector led the gains.

Frankfurt’s DAX 30 climbed 2.06 percent to 6,742.59 points and in Paris the CAC 40 rallied 2.38 percent to 3,309.29 points.

Madrid’s IBEX 35 index won 3.33 percent and Milan’s FTSE-MIB surged 4.17 percent.

The European single currency jumped to $1.2285 from $1.2178 late on Thursday in New York. The euro briefly topped $1.24 on Thursday, which was the highest level since June 5, but it quickly pulled back as traders fretted over the lack of concrete ECB measures.

“Yesterday’s… selling helped remove some of the froth from risk assets ahead of today’s critical US jobs number,” said Spreadex trader David White.

Investors were turning their attention to the release of US non-farm payrolls data for July, due out later Friday, for clues on the health of the world’s largest economy.

European stocks markets had slumped on Thursday, with Paris closing down 2.68 percent, on the ECB’s decision to hold off any concrete moves to support the euro such as bond buying.

Many had hoped for fresh action after ECB chief Mario Draghi last week said the European Central Bank would do whatever was needed to save the euro.

“In light of investors’ hopeful anticipation for a showering of central bank silver bullets, yesterday’s meeting killed buying as a result of what was not said, dashing hopes that Draghi would not only act radically but act quickly, too,” White added.

Both the ECB and the Bank of England maintained current monetary policies at meetings Thursday, a day after the US Federal Reserve also held the status quo, disappointing investors hoping for new economic stimulus measures.

Markets were also digesting company earnings. In London, Royal Bank of Scotland surged 4.94 percent to 214.6 pence after the British state-rescued bank said its net losses narrowed in the second quarter to £466 million ($723 million, 594 million euros).

On the downside, International Airlines Group slumped 4.40 percent to 152.3 pence after the owner of Iberia and British Airways crashed into a first-half net loss.

In Frankfurt, Allianz won 3.73 percent to 81.55 euros after the German insurance giant posted a solid second-quarter net profit, boosted partly by its life and health divisions, and confirmed its full-year outlook.

Dexia had its share temporarily suspended due to a computer glitch and after the failed Franco-Belgian banking group reported a 1.2-billion-euro ($1.47-billion) loss in the first half linked mainly to interest payments on state bailouts. Dexiashares were stable at 0.21 euros after trading resumed

Across in Asia, stock markets closed mostly down, with downbeat earnings reports from two of Japan’s biggest electronics firms Sharp and Sony adding to eurozone concerns.

Tokyo fell 1.13 percent, Seoul shed 1.11 percent and Sydney lost 1.12 percent. Shanghai ended 1.02 percent higher after China’s securities regulator said it would cut transaction fees on equity trading by 20 percent from September 1.

US stocks slid for a fourth straight day Thursday.

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