* FTSEurofirst 300 firms 1 percent
* Cyclical autos, miners lead after U.S. jobs data
* European stock 'fear gauge' sinks 6 percent
By Tricia Wright
LONDON, May 3 (Reuters) - European shares rose to a new
five-year closing high on Friday as robust U.S. jobs data
spurred on investors already heartened by the central bank
stimulus that has supported equities over other assets.
Cyclical auto and mining stocks , so-called
as they are geared to the economic cycle, were best supported,
rising more than 3 percent after the data which showed U.S.
April non-farm payrolls rose by 165,000, ahead of the forecast
"Good job numbers in the U.S. which have been taken well...
For now it is hard to see what can stop this market," said Lex
van Dam, hedge fund manager at Hampstead Capital, which manages
around $500 million in assets.
The FTSEurofirst 300 ended up 1 percent at
1,218.60, its highest close since June 2008, leading to a 1.9
percent gain over the course of a week in which the European
Central Bank cut interest rates in a fresh attempt to stimulate
In a sign of improving investor appetite for equities, the
Euro STOXX 50 Volatility Index sank 6 percent on Friday.
The healthcare and food & beverages sectors
which are seen as defensive plays against economic uncertainty
were the worst performers, trading up 0.1 percent and flat
Some analysts reckoned the highly unusual theme which has
characterised market trends this year, whereby defensive stocks
have outperformed cyclicals in a rising market, has run its
"I think we now have the potential policy expectations at
least to prompt a degree of rotation to a more normalized
pattern of... cyclical and financial leadership in a market
which is heading north on liquidity stimulus," said Ian
Richards, head of equity strategy at Exane BNP Paribas.
According to Thomson Reuters StarMine data, metals & miners
and financials trade on respective 12-month forward
price/earnings ratios of 10.1 times and 10.5 times.
This looks cheap compared with consumer staples, on 17.2
times, and healthcare on 14.7 times.
"I've already positioned for it," said Old Mutual fund
manager Kevin Lilley - referring to a potential loss in
leadership of defensive stocks.
Among his biggest overweight bets are banks, autos, and
miners, while he is most bearish on consumer staples. The
European equities funds Lilley runs have around 90 million
pounds ($140.1 million) of assets under management.