EUROPE MARKETS: German Stocks Set For All-time High, With Investors Hopeful About Key U.S. Jobs Data

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

U.K.'s FTSE 100 on track for record close

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European stocks rose for a second straight session on Friday, boosted by optimism over record stock closing levels in the U.S., with hopes high for the closely watched U.S. jobs report.

The Stoxx Europe 600 Index climbed 0.7% to 394.46, on track for its highest close since May 16. For the week, the pan-European benchmark was set for a 0.8% advance, its biggest weekly jump since the week ending May 5, according to FactSet data.

The positive mood in Europe came after "having started on the front foot yesterday, helped by a continuation of the recent theme of an improving economic environment, as further improvements in economic data fueled a positive start to the month, which was carried on in the U.S.," said Michael Hewson, chief market analyst at CMC Markets in a note.

All three major U.S. indexes (http://www.marketwatch.com/story/us-stocks-on-track-to-edge-higher-rebounding-from-two-day-dip-2017-06-01) ended at all-time highs on Thursday, after private sector jobs data in U.S. easily beat expectations. The data raised hopes the official nonfarm payrolls report, out at 1:30 p.m. London time, or 8:30 a.m. Eastern Time, will also paint an upbeat picture of the labor market.

Economists polled by MarketWatch expect 185,000 new jobs were added to the economy in May (http://www.marketwatch.com/story/another-shower-of-new-us-jobs-expected-for-may-2017-06-01). A solid number could further strengthen expectations that the U.S. Federal Reserve will raise interest rates later this month, as well as send a positive signal about the health of the world's largest economy.

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U.S. stock futures were trading higher in the early going Friday (http://www.marketwatch.com/story/us-stocks-poised-to-bust-out-new-records-as-optimism-about-payrolls-data-builds-2017-06-02).

Individual indexes: Germany's DAX 30 index rallied 1.4% to 12,848.86, beating the previous record set in the middle of May and setting it on track for an all-time closing high.

The U.K.'s FTSE 100 index was also set for a record close, up 0.3% at 7,569.86. The gain came as the pound continued to slide on nerves ahead of next week's U.K. general election. Polls are increasingly pointing to a tight race between Prime Minister Theresa May's Conservative Party and the opposition Labour Party.

Read:5 things to know about the U.K.'s general election next week (http://www.marketwatch.com/story/5-things-to-know-about-the-uk-general-election-next-week-2017-06-01)

And see: U.K. election -- the nightmare, best and most-likely scenarios for stocks (http://www.marketwatch.com/story/uk-election-the-nightmare-best-case-and-most-likely-scenarios-for-stocks-worldwide-2017-06-01)

France's CAC 40 index gained 1% to 5,369.90, while Spain's IBEX 35 climbed 1.1% to 11,002.70.

Stock movers: Banks were among the biggest beneficiaries of the upbeat sentiment on Friday, with the hopes for higher interest rates in the U.S. providing a boon for the sector. The Stoxx Europe Banks Index gained 1.5%, on track for its biggest gain since April.

Shares of Credit Agricole SA (ACA.FR) moved up 2.8% in Paris, Deutsche Bank AG (DBK.XE) (DBK.XE) put on 2.6% in Frankfurt, and Barclays PLC (BCS)(BCS) added 1.4% in London.

Shares of Banco Popular Español SA (POP.MC) gained 0.8%, after an 18% slump on Thursday. That decline came on the back of a Reuters report that a top EU watchdog has warned the Spanish bank it will have to be wound down (https://www.reuters.com/article/us-banco-popular-m-a-eu-exclusive-idUSKBN18R25V) unless it finds a buyer.

Oil companies, however, curbed gains in Europe as crude oil and Brent both plunged more than 2%. The sharp fall came after U.S. President Donald Trump's withdrawal from the Paris Climate Accord sparked concerns of higher U.S. oil production (http://www.marketwatch.com/story/oil-prices-stay-weak-as-investors-return-to-worries-over-rising-production-2017-06-02).

Shares of Tullow Oil PLC (TLW.LN) slid 2.4%, BP PLC (BP.LN) (BP.LN) fell 0.8% and Eni SpA (ENI.MI) gave up 1.2%.

(END) Dow Jones Newswires

June 02, 2017 07:09 ET (11:09 GMT)