UPDATE 2-Cyclical rally, U.S. jobs data drive European stocks to 1-week high

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* Banks, automakers lead gains in Europe
* AB Foods jumps after positive comments on Primark
* U.S. payrolls rises better than expected in June
* Wirecard slumps as police raid headquarters

(Updates to market close)
By Sruthi Shankar
July 2 (Reuters) - European shares closed at a one-week high
on Thursday as hopes of a COVID-19 vaccine and a
better-than-expected rebound in U.S. hiring overshadowed
concerns about surging coronavirus infections.
The pan-European STOXX 600 .STOXX rose 2%, easing slightly
from highs hit after data showed the U.S. economy created a
record 4.8 million jobs in June as more restaurants and bars
resumed operations. Banks .SX7P were the top gainers in Europe, jumping 4.3%
to mark their best day since June 5, while other cyclical
sectors such automakers .SXAP , chemicals .SX4P and insurance
companies .SXIP gained between 2.5% and 3.4%.
Equity markets started the second half of the year on a
positive note earlier this week, as a COVID-19 vaccine developed
by German biotech firm BioNTech BNTX.O and U.S. giant Pfizer
PFE.N was found to be well-tolerated in early stage human
trials, while business surveys showed a slump in global
manufacturing eased in June. "The market response is likely to be positive, but
inevitably tinged with growing concerns that the recovery is
already losing steam," said Seema Shah, chief strategist at
Principal Global Investors.
"With the closings having been reversed or paused across 40%
of the U.S., July's job report may paint a much weaker story."
Raising risks of fresh lockdowns, new U.S. cases of COVID-19
jumped nearly 50,000 on Wednesday, according to a Reuters tally,
marking the biggest one-day rise since the start of the
pandemic. Further adding to concerns, Britain and the European Union
failed to make progress in talks on post-Brexit relations this
week due to major differences, officials said. Among individual movers, Associated British Foods ABF.L
gained 4.1% after saying trading in its Primark fashion stores
that reopened after the lockdown has been "reassuring and
encouraging". Scandal-hit Wirecard WDIG.DE slumped 35.4% after police
and public prosecutors raided its headquarters in Munich and
four properties in Germany and Austria. Dutch construction company BAM Groep BAMN.AS dropped 11.6%
as it warned of a "significant" loss in the first half of the
year.