Euro shares higher on German data, ignore weak U.S. numbers;DAX up 0.66%

Investing.com - European stocks closed higher Friday, on solid German economic numbers despite disappointing U.S. job data.

At the close of European trade, the EURO STOXX 50 added 0.54%, France’s CAC 40 eased higher by 0.26%, while Germany’s DAX 30 climbed 0.66%.

Igniting the rally, official data indicated industrial production in Germany climbed by 1.3% in July, beating expectations for a 0.2% rise and following a revised 0.4% decline the previous month.

Pressuring shares, the U.S. Bureau of Labor Statistics said that nonfarm payrolls rose by 96,000 in August, less than the expected 125,000 rise and following an increase of 141,000 rise the previous month.

The report also showed that the employment rate in the U.S. ticked down to 8.1% last month from 8.3% in June. Analysts had expected the unemployment rate to remain unchanged. 

Helping the bullish environment, ECB President Mario Draghi unveiled on Thursday a new bond-purchasing program, dubbed Outright Monetary Transactions, which he said will provide "a fully effective backstop" against market volatility.

Speaking at the bank’s post-policy meeting press conference, Draghi said "strict and effective conditionality” was an essential element of the plan.

Under the terms of the plan, the ECB would buy unlimited amounts of government bonds of up to three years in maturity, as long as the country in question is signed up to the OMT program and agrees to economic reforms.

The bank also maintained the benchmark interest rate at a record-low 0.75% at its policy meeting earlier in the day, in line with expectations.

On Thursday, ECB President Mario Draghi unveiled a new bond purchasing program, dubbed Outright Monetary Transactions, which he said will provide "a fully effective backstop" against market volatility.

Under the terms of the plan, the ECB would buy unlimited amounts of government bonds of up to three years in maturity, as long as the country in question is signed up to the OMT program and agrees to economic reforms.

The ECB also maintained the benchmark interest rate at a record-low 0.75% at its policy meeting earlier in the day, in line with expectations.

Financial stocks posted sharp gains following Draghi's comments, as France's Societe Generale and BNP Paribas soared 6.28% and 3.53%, while German lenders Deutsche Bank and Commerzbank rallied 4,87% and 4.14% respectively.

Peripheral lenders were also broadly higher, led by Italian banks Unicredit and Intesa Sanpaolo, up 4.68% and 4.04% respectively, and followed by Spain's Banco Santander and BBVA, whose shares jumped 2.83% and 2.03%.

Also on the upside, mobile phone maker Nokia soared 5.18%, after slashing  prices of its older smartphone models using Microsoft Windows software on Thursday, a day after investors gave its latest Lumia phones a thumbs-down. 

Accordong to a Reuters report, the Finnish group cut the price of its mid-range Lumia 800 Windows Phone by around 15% this week and made smaller reductions on other Windows models.

In London, FTSE 100 rose 0.30%, as U.K. lenders tracked their European counterparts sharply higher.

Shares in Barclays rallied 5.05% and the Royal Bank of Scotland jumped 3.81%, while Lloyds Banking and HSBC Holdings advanced 3.18% and 0.95% respectively. 

Mining companies also added to gains, as shares in giants Rio Tinto and BHP Billiton surged 3.20% and 1.86%, while copper producers Xstrata and Kazakhmys climbed 1.42% and 3.09%.

Bloomberg reported earlier that Glencore International adjourned a meeting of its shareholders to vote on an offer for Xstrata, citing "developments overnight", amid speculation it is in the process of improving its offer over fears that Xstrata may reject the current deal. 

The news sent Glencore shares were down 3.98%.

In the U.S., equities were mixed with the Dow down 0.04%, the S&P 500 higher by 0.22% and the tech heavy Nasdaq down 0.05% in midsession trade.