RTTNews - The European markets rose for the first time in four days on Friday after a report showed fewer-than-expected job losses in the U.S. last month and Rio Tinto scrapped a proposed $19.5 billion deal with Chinalco in favor of a iron ore joint venture with BHP Billiton and a $15.2 billion share sale to reduce its debts.

The Labor Department said in its report that non-farm payroll employment fell by 345,000 jobs in May following a revised decrease of 504,000 jobs in April. Economists had expected a decrease of about 520,000 jobs compared to the loss of 539,000 jobs originally reported for the previous month.

At the same time, the report also showed that the unemployment rate jumped to 9.4% in May from 8.9% in April. With the increase, the unemployment rate came in above economist estimates of 9.2% and rose to its highest level since August of 1983.

Crude for July delivery rose $0.46 to $69.27 a barrel on the New York Mercantile Exchange, by the time the European markets closed.

The FTSEurofirst 300 index of pan-European blue chips closed 0.66% higher at 872.29 points, while the narrower DJ Stoxx 50 index rose 0.72% to 2,146.35 points.

The U.K. markets gained, shrugging off the political woes faced by Prime Minister Gordon Brown who managed to avert an immediate threat to his government with a cabinet reshuffle.

Around Europe, the U.K.'s FTSE 100 index climbed 1.18% to 4,438.56, while France's CAC 40 index surged up 0.82% to 3,339.05 and Germany's DAX index rose 0.24% to 5,077.03.

Rio Tinto, the world's third biggest miner, jumped 10.3%, while BHP, the world's biggest, climbed 6.8% and Anglo American, the third biggest, surged up 6%. Copper miner Antofagasta gained 6.1%.

Rio Tinto scrapped the proposed $19.5 billion deal with Chinese state-owned Aluminum Corp. of China or Chinalco, the holding company of Aluminum Corp. of China Ltd., and instead launched a heavily discounted $15.2 billion rights issue. The scrapping of the deal was announced after Rio Tinto entered into a 50-50 joint venture to combine its Western Australian iron ore assets with larger rival BHP Billiton.

Heavily weighted oil stocks edged higher after crude oil prices advanced. Royal/Dutch Shell, Europe's second biggest oil company, and Total, the third biggest, both rose 1%.

Lafarge, the world's biggest cement maker, surged up 2.9% after Goldman Sachs upgraded the stock to buy from neutral and added to its conviction buy list.

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