European shares ended slightly higher on Friday after paring gains on a mixed US jobs report, while construction stocks remained among the top gainers thanks to an improving outlook. US nonfarm payrolls data for January came in much lighter than expected, with just 36,000 jobs added, although the jobless rate fell to its lowest level since April 2009 - a conflicting report that took markets some time to digest.
After selling off slightly on the initial numbers, released prior to the US open, the FTSEurofirst 300 traded flat after US markets opened lower, before recovering to end up 0.2 percent at 1,165.27 points. "People are debating whether the report was weak or strong," Ryan Wang, economist at HSBC, said. "I think it was actually quite a strong report, and am focused on the decline in the unemployment rate."
The index had closed flat Thursday, recovering from lows after strong US service sector and weekly jobs data, and nonfarm payrolls had been expected to support the trend. In spite of the late selloff, construction stocks stayed among the top gainers and the STOXX Europe 600 Construction & Materials index ended up 1.8 percent, led by a 10 percent gain for Finnish builder YIT on a strong outlook, buoyed by demand for new flats in Russia and Finland.
Elsewhere in the sector, Swedish lockmaker Assa Abloy gained 2.6 percent ahead of its results on Monday. A recent run of results from sector peers such as Ambuja, ACC, Cemex and Vicat were supportive, said UBS analysts in a note, highlighting HeidelbergCement, up 3 percent, as its top pick.
On the blue chip ESTOXX 50, which closed up 0.3 percent, technicals point to further upside, said Philippe Delabarre, analyst at Paris-based Trading Central. "Several technical elements are gathered to forecast further upside on the European index. Indeed, the area between 2,960 & 2,980 points plays a support role," he said, citing 2,980 as an entry point, with a first target of 3,025 points.
Across Europe, Britain's FTSE 100 ended up 0.2 percent, while Germany's DAX and France's CAC-40 both ended up 0.3 percent. Cable & Wireless World-wide was among the top risers among individual names, closing up 4.6 percent after market talk emerged of bid interest from an unnamed British company. The telecom declined to comment.
Also on the upside, Swiss biotech firm Actelion rose 4 percent, outperforming a 0.1 percent fall in the European healthcare index, after a leading hedge fund investor called for a management shake-up. A late afternoon statement from the firm rejected the demands. Among heavyweight sectors, the STOXX Europe 600 Basic Resources closed up 0.6 percent, boosted by a push through the $10,000 a tonne barrier for copper and gains for other industrial metals after the falling US jobless rate buoyed the demand outlook. Top faller across Europe was Nordea, which ended down 5 percent after the Swedish government sold a 6.3 percent stake in the firm and said it plans to sell more.