US Jobs Data Boosts European Markets, Seadrill Vaults 39%

Lucy Stoeva
04 Mar, 2016
New York City

European market indexes recorded solid gains after the strong U.S. jobs report. Norway-based Seadrill surged 38.8% on debt refinancing speculation. Gemalto soared 9.1% to a seven-year high, after the software maker forecasted rising profitability in 2016.

[R]4:00 PM Frankfurt, Germany - European market indexes recorded solid gains after the strong U.S. jobs report. Norway-based Seadrill surged 38.8% on debt refinancing speculation. Gemalto soared 9.1% to a seven-year high, after the software maker forecasted rising profitability in 2016.[/R]

European stocks recorded solid gains on Friday after a strong monthly report on U.S jobs alleviated concerns about a recession in the U.S.

The American economy added 242,000 nonfarm jobs in February and unemployment rate was flat at 4.9%. The average hourly wage, however, fell $0.03 cents, or 0.1%, to $25.35.

Rising prices of major industrial metal led to more gains for mining shares. Glencore surged 11.9%, Anglo-American advanced 11.1%, BHP Billiton gained 9.1%, and Antofagasta rose 7.7%.

Seadrill skyrocketed 38.8% on speculations about debt refinancing of the Oslo-based drilling company.

In Amsterdam, Gemalto soared 9.1%, a seven-year high, after the software developer estimated rising profitability in 2016.

In Italy, economic growth slowed down to 0.1% in the fourth quarter of 2015, according to government statistics agency Istat.

In addition, Italian banking stocks came under pressure after the European Central Bank required a new business plan from Banca Carige.

Banca Carige tumbled 9.6% on the news, while Banco Populare Societe Cooperativa fell 4.2%, UniCredit lost 2.2%, and Unione di Banche Italiane was down 1.9%.

The FTSE 100 index rose 68.97, or 1.13%, to 6,199.43, while the DAX index gained 72.25, or 0.74%, to 9,824.17.

In Paris, the CAC 40 index added 40.54, or 0.92%, to 4,456.62.

London Stock Exchange Group Plc declined 1.31% to 2,855 pence after the company reported an increase in 2015 profits and said a merger with Deutsche Boerse would be ""compelling.""

In Frankfurt, shares of Deutsche Boerse declined 2.02% to €76.62.

LSE said the potential merger, still discussed by the two companies, would lead to substantial revenue and cost benefits. LSE did not mention a potential bid from Intercontinental Exchange.

Under the proposed merger, LSE would own 45.6% of the new entity, while Deutsche Boerse would control the remaining 54.4%.

For 2015, the UK stock exchange said adjusted pre-tax profit increased 31% to £643.4 million.

Results surpassed markets expectations, with EBITDA of £769 million and earnings per share of 129.4 pence in 2015.

Gemalto soared 9.12% to €64.48, a seven-year high, after the Amsterdam-based software developer estimated rising profitability in 2016 due to growth in secure products for bank transactions and electronic documents.

Revenue increased 16% in 2015 to €3.1 billion due to solid growth in payment, government programs and machine-to-machine business segments, as well as the addition of SafeNet.

Operating profit was up 10.4% to €423 million from a year ago with profit margin of 13.5%.

Adjusted diluted earnings per share declined to €3.41 from €3.55 in 2014.

Seadrill surged 38.8% to 29.19 Norwegian kroner, the largest daily gain since the offshore driller was listed on Oslo Stock Exchange in 2005.

The large move in the stock price was related to possible refinancing of its $10 billion debt. The company’s lead shareholder, John Fredriksen, this week raised $510 million in cash, fueling speculation of a bailout.

The decision of rival company Noble Corp to buy back bonds also enhanced expectations of a refinancing plan.