London: European shares edged higher early on Friday in a choppy session ahead of key US unemployment data, with commodities leading the risers.
By 0929 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.4% at 673.50 points, having been down as much as 668 points earlier in the session. The index is down around 19% this year.
“It is intriguing why the market is trading up. We know markets are supposedly very nervous ahead of the US non-farm payrolls ... Maybe this is just a little bit of calm before the storm kicks in,” said Jim Wood-Smith, head of research at Williams de Broe.
“Resource stocks are really pushing the market into positive territory. I presume that this is on the back of news coming out of the Chinese central bank overnight that they are going to be taking aggressive measures to help the economy,” he said.
Energy stocks were in demand. China’s central bank chief, Zhou Xiaochuan, said that he sees signs of the economy recovering and officials would err on the side of acting sooner rather than later to revive growth in the world’s third largest economy.
BP, Royal Dutch Shell and Total rose 0.2-0.9%.
Mining stocks were on the up as copper gained 2.3% and gold rose to $940 per ounce.
Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation and Rio Tinto were up 0.5-2.3%.
Automobiles were higher. French carmaker PSA Peugeot-Citroen gained 0.5% as chief executive Christian Streiff told a German newspaper the group is negotiating with Germany’s BMW over an expansion of their existing cooperation.
BMW was down 0.7%.
The banking sector fell back from earlier gains. UniCredit, BNP Paribas, Societe Generale and Banco Santander were down 1.7-6.7%.
UK banks Barclays and Lloyds Banking Group, however, were up 1.8% and 3.9%, respectively.
Life insurers were also in the doldrums, with Aviva, Legal & General, Prudential and Swiss Life all down between 1.2 and 8.1%.
Among drugmakers, who were also weaker, AstraZeneca, Novo Nordisk and Sanofi-Aventis were down between 1.5 and 4%.
Later in the session, investors will eye the US non farm payrolls.
Economists expect the payrolls report will show the economy shed 648,000 jobs in February compared with 598,000 jobs lost in January. The unemployment rate is expected to have risen to 7.9% in February compared with a rate of 7.6% in January.
“Growth estimates around the world are still sliding and we have not seen any signs of stabilization in the US or global economies. There are nerves ahead of the employment report today ... there is no good news anywhere,” said Bernard McAlinden, strategist at NCB Stockbrokers.
Across Europe, the FTSE 100 index was up 0.9%, Germany’s DAX was 0.7% higher and France’s CAC 40 was up 0.7%.