European stock markets made modest gains Thursday, powered by positive US employment data and upbeat comments from the European Central Bank on eurozone growth prospects.

In London the FTSE 100 index rose 0.35 percent to close at 5125.64 while in Paris the CAC 40 added 1.05 percent to end the session at 3708.73. In Frankfurt the Dax gained 0.67 percent to reach 5480.92.

Elsewhere there were gains of 0.75 percent in Brussels, 0.88 percent in Milan, 1.42 percent in Madrid, 0.29 percent on the Swiss Market Index and 0.64 percent in Amsterdam.

Wall Street stocks powered higher after better-than-expected US economic data on the weak labour market and positive company news.

The Dow Jones Industrial Average was up 1.55 percent at 9953.59 at mid-day while the Nasdaq composite had risen 1.87 percent to 2093.97.

"Better-than-expected earnings, and reassuring guidance, from bellwether Cisco, along with some better-than-expected economic headlines, has set a positive tone," said Patrick O'Hare at Briefing.com.

Networking specialist Cisco, which recently joined the Dow index of 30 blue-chip shares, leapt 2.62 percent to 23.90 dollars after reporting earnings and revenue above market expectations and forecasting higher sales in the current quarter.

On the macroeconomic front, Labor Department data showed initial claims for US unemployment insurance benefits fell more than expected last week, lifting sentiment ahead of Friday's anxiously awaited government report on the October labour market.

Most analysts expect an October unemployment rate of 9.9 percent, up from a 26-year high of 9.8 percent in September.

Bonds firmed. The yield on the 10-year US Treasury bond slipped to 3.529 percent from 3.546 percent Wednesday and that on the 30-year bond dropped to 4.416 percent from 4.434 percent. Bond yields and prices move in opposite directions.

Market sentiment was lifted in Europe by the US employment data as well as by comments from ECB head Jean-Claude Trichet after the bank decided to hold its benchmark interest rate at a record low 1.0 percent.

"The latest information continues to signal an improvement in economic activity in the second half of this year," Trichet said.

Morgan Stanley economist Elga Bartsch commented that "the ECB is starting to become more optimistic on the growth outlook."

In London mining issues continued to perform well in response to strong gold prices, with Fresnillo rising 2.56 percent on the day.

Banks by contrast suffered in line with US counterparts. RBS fell 3.45 percent and Lloyds Banking Group 3.82 percent.

In Paris the retail sector led the way after in the wake of positive earnings results from Delhaize of Belgium. Carrefour added 3.52 percent and Casino Guichard 1.34 percent.

Banking giant BNP, after reporting a 44.8-pct quarterly profit leap, surged 3.29 percent.

In Frankfurt, BNP peer Commerzbank shed 5.65 percent after revealing a heavy net loss in the third quarter because of restructuring costs and writedowns.

In Asia on Thursday, Tokyo closed down 1.29 percent at a one-month low, depressed by caution over earnings results from Toyota Motor.

The benchmark Nikkei-225 index fell to 9,717.44 points, the lowest close since October 6.

Hong Kong shares closed down 0.63 percent Thursday on profit-taking after the previous day's rebound.

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AFP

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