European equities closed higher on the final trading day of the week after positive US economic data fueled expectations that the Federal Reserve could raise interest rates in the near future, giving a lift to stocks on both sides of the Atlantic.
The US added 242,000 new jobs in February, according to data published by the Bureau of Labor Statistics. This exceeded analysts' expectations for a monthly gain of around 200,000 and triggered speculation that the Federal Reserve could factor the favorable gain into its decision-making process later this month regarding whether or not to raise interest rates following December's first rate increase in almost a decade.
Economic developments in the US can have a knock-on effect on markets around the globe because the country is a major contributor to global gross domestic product growth. Export-oriented European countries, such as Germany, derive profit from US companies importing their goods. Fluctuations in the value of the greenback can also have an affect on the value of oil - which is a dollar-denominated commodity. If economic developments in the US result in the dollar gaining in value against a basket of currencies, oil becomes less affordable for buyers in countries with other currencies.
In equities, commodities stocks led gainers on London's FTSE 100 index, with Glencore, Anglo American, BHP Billiton, Antofagasta and Rio Tinto rallying 11.9%, 11.1%, 9.1%, 7.7%, and 5.9%, respectively. Investment managing firm Aberdeen Asset Management followed with a 5.9% gain, and UK bank Barclays rose 4.8%. Low-budget airline easyJet climbed 4.5%.
On Frankfurt's DAX, airline operator Deutsche Lufthansa and car-maker Volkswagen both gained 4.2%, followed by German industrial conglomerate Thyssenkrupp up 3.1%. Fertilizer supplier K+S ended 2.4% higher.
And, on Paris' CAC-40, French railway firm Alstom surged 7.6%, leading gainers. Steelmaker ArcelorMittal gained 7% and supermarket chain Carrefour was 6.2% higher, followed by Technip, a provider of project management, engineering and construction services, closing 5.3% higher.
The FTSE 100 closed 1.13% higher, the DAX rose by 0.74% and the CAC-40 gained 0.92%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
