European shares rise on US jobs data

European shares rose on Wednesday, buoyed by global optimism as soft US labour market data increased expectations of a Federal Reserve rate cut, Reuters reported.

The pan-European STOXX 600 climbed 0.5 per cent by 08:40 GMT, rebounding from previous losses. Wall Street closed higher on Tuesday, and Asian markets rose on Wednesday after US job openings fell in April, suggesting a cooling labour market and reinforcing hopes for a Fed rate cut in September.

Retail stocks led gains, with the sector rising 1.4 per cent to a two-year high. Zara-owner Inditex surged 4.7 per cent on strong first-quarter trading results, and WH Smith advanced 3.7 per cent on expectations of robust summer travel demand. Spain’s IBEX index increased by 0.6 per cent.

Investors are now focused on the European Central Bank’s (ECB) interest rate decision on Thursday, where a 25 basis point cut from the current record level of 4 per cent is anticipated. ECB policymaker Peter Kazimir indicated that the central bank is nearing its first rate cut as inflation trends positively.

Additionally, a survey showed that eurozone business activity expanded at its fastest rate in a year in May, driven by growth in the services sector.

ASML shares rose 3.3 per cent following positive feedback from Jefferies on discussions with TSMC, lifting the technology sector by 1.6 per cent. However, European banks lagged, with a 0.2 per cent decline.