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European shares spike higher ahead of US data

Appetite for equities has been capped by uncertainty over Spain’s debt crisis as Madrid hesitated over asking for a bailout from the European Central Bank. (Appetite for equities has been capped by uncertainty over Spain’s debt crisis as Madrid hesitated over asking for a bailout from the European Central Bank.)Premium
Appetite for equities has been capped by uncertainty over Spain’s debt crisis as Madrid hesitated over asking for a bailout from the European Central Bank.
(Appetite for equities has been capped by uncertainty over Spain’s debt crisis as Madrid hesitated over asking for a bailout from the European Central Bank.)

Markets have been positioning for a possible upside surprise to the release

London: European equity markets extended gains in mid-session trade on Friday, with investors squaring positions ahead of a key US jobs report later in the session, where risks are seen skewed to the upside.

Markets have been positioning for a possible upside surprise to the release, following a strong employment report from the US private sector earlier in the week.

“Looks like typical short-overing ahead of the numbers and the weekend in general. Wouldn’t be too surprising if the numbers would turn out better than expected so close to the (US presidential) elections," said Markus Huber, senior trader at ETX Capital.

The FTSEurofirst 300 was up 0.9% at 1,109.82 points by 5:32pm.

UK-listed miner Rio Tinto was among top gainers, along with French oil services group Technip, which was also boosted by a contract win in Mexico.

“A good NFP reading could help German, French or UK stocks but Italy and Spain are more focused on the European problems so if there are problems in Spain they’re going to be left behind," a trader said.

Appetite for equities has been capped by uncertainty over Spain’s debt crisis as Madrid hesitated over asking for a bailout that would pave the way for monetary support from the European Central Bank.

Smaller Spanish lenders Bankia and Banco Popular underperformed on Friday, shedding 3.3% and 0.1%.

The pan-European FTSEurofirst 300 index was up 0.3% at 1,104.22 points by 1:21pm. The euro zone blue-chip Euro STOXX 50 was up 0.5% at 2,498.39.

Charts on the Euro STOXX 50 December futures, up 0.7% at 2,493, showed the index enjoyed technical support in the 2,468 area, which halted a fall on Thursday and triggered bounces in the previous two sessions.

“As long as prices are above 2,468, a new up leg remains the most likely scenario towards (yesterday’s high at) 2,507," Nicolas Suiffet, a technical analyst at Paris-based Trading Central, said.

Suiffet added the index could rise as high as 2,538 points in the very short term. This level roughly corresponds to the 61.8% retracement of a down move in the second half of September

“Alternatively, a push below 2,468 would lead, at least, to 2438 points," he cautioned. Reuters

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