European Shares Trim Gains as Delta Virus Offsets U.S. Jobs Beat

(Bloomberg) -- European equities pared gains on Friday as investors weighed stronger-than-forecast U.S. job growth against concerns about the impact of the fast-spreading delta virus strain.

The Stoxx 600 Europe Index was up 0.2% as of 3:43 p.m. in London, trimming an earlier advance of as much 0.6%. Travel, leisure and technology stocks led gains, while banks fell most. U.S. job growth accelerated in June as nonfarm payrolls increased by 850,000, beating the median estimate in a Bloomberg survey of economists for a 720,000 rise.

“The data is currently just too noisy to interpret and as such the Federal Reserve will continue resisting calls to speed up its policy tightening and be comfortable sitting on their hands until a clearer picture emerges,” said Hinesh Patel, portfolio manager at Quilter Investors. “Given the U.S. is likely to lead the way for other developed economies, we should expect the global money taps to keep flowing for a while longer yet.”

U.S. Job Growth Surges Most in 10 Months, Jumping Past Forecast

Europe’s equities benchmark has kicked off the second half of the year on a positive note after a stellar first six months, as investors bet on an economic rebound and await what’s expected to be another strong earnings season. The Stoxx 600 is about 0.5% away from a record closing level reached last month.

“With the stock market hovering near fresh records, things are calmer and results could be the next catalyst as we are already seeing very positive revisions,” said Diego Fernandez, chief investment officer at A&G Banca Privada in Madrid.

European stock funds saw their first outflows in 12 weeks in the week through June 30, with $62 million exiting, according to Bank of America Corp. and EPFR Global data. In the week, the Stoxx 600 is headed for a dip of 0.2%.

Among individual moves, Kindred Group Plc jumped 7% after announcing it’s acquiring the remaining 66.6% of shares in Relax Gaming, a B2B iGaming supplier. Ambu slumped as much as 16% after lowering its full-year financial forecast.

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