European shares edge higher before key U.S. data

Published 02-09-2016, 02:35 pm
Updated 02-09-2016, 02:40 pm
© Reuters.  European shares edge higher before key U.S. data

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report)

* Pan-European STOXX index up 0.3 percent

* Gains in utilities, pharma offset by weaker banks

* SBM Offshore plummets as Brazil prosecutors reject leniency deal

* Accor lifted by upgrade

By Danilo Masoni

MILAN, Sept 2 (Reuters) - European shares rose on Friday, but stayed within recent tight ranges as investors waited key U.S. jobs data later in the day for clues about the Federal Reserve's next interest rate hike.

The pan-European STOXX .STOXX index was up 0.3 percent by 0848 GMT, following a flat close in the previous session, with gains among defensive stocks such as healthcare and utilities partly offset by weaker banks.

U.S. employment growth likely moderated in August, but was probably still strong enough to push the Federal Reserve to raise interest rates later this year. expect U.S. nonfarm payrolls to have increased by 180,000 jobs last month. The data is due at 1230 GMT.

Some investors said a number of between 130,00 and 190,000 would confirm expectations for one rate hike in December, while for a September hike a figure well above 200,000 is needed.

"We still maintain our view that there will be no September hike. Theoretically, a strong data today could push the central bank to act, especially in view of its now obviously damaged credibility," Swissquote Bank market analyst Arnaud Masset said.

"However, in our view, U.S. economic health is largely overestimated and so we do not predict a strong figure today," Masset added in a note.

The STOXX bank index .SX7P fell 0.3 percent, snapping a three-day winning streak fueled by expectations of a rate hike in the United States as early as September.

The index was the worst sectoral faller in Europe.

Shares in Banco Santander SAN.MC , Barclays BARC.L and Deutsche Bank DBKGn.DE were down between 0.8 percent and 1.2 percent, while Intesa Sanpaolo ISP.MI added 0.9 percent.

SBM Offshore SBMO.AS plunged 11.4 percent, leading the STOXX losers, after prosecutors in Brazil rejected a deal allowing the Dutch oil-ship lessor to avoid prosecution for corruption related to contracts with oil group Petrobras. Internet RKET.DE fell 8.5 percent after the German e-commerce investor reported a first-half loss mainly due to impairments at Global Fashion Group. ACCP.PA was the biggest gainer, up 3.4 percent, boosted by an upgrade from Barclays, while the best sectoral performers in Europe were utilities .SX69 and healthcare .SXDP which rebounded from recent losses. (Editing by David Holmes)

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