European stocks struggled Friday as caution prevailed before vital US non-farm payrolls data, while Tokyo rose on stimulus hopes after Japan’s prime minister signalled his exit.
Investor sentiment in Asia and Europe was also buoyed somewhat following another record close on Wall Street.
London stocks added just 0.1 percent in late morning deals, and Frankfurt also won 0.1 percent in midday eurozone trade — but Paris sagged 0.3 percent.
The key payrolls data could have a huge bearing on the Federal Reserve’s plans for tapering its ultra-loose monetary policy.
“The major risk to the equity rally is the Fed tapering,” said Ipek Ozkardeskaya, senior analyst at online bank SwissQuote.
“And today’s US jobs data could shake the Fed expectations to the hawkish or to the dovish side depending on the strength of the data.”
Friday’s subdued session came at the end of a strong week as concerns about the fast-spreading Delta variant, which weighed on confidence for much of August, gave way to optimism over the recovery outlook.
Data showing fewer people than expected applied for jobless benefits in the United States last week — the lowest since March 2020 — provided a positive lead ahead of the NFP numbers, which could have a huge bearing on the Federal Reserve’s plans for tapering its ultra-loose monetary policy.
Fed boss Jerome Powell last week indicated that the bank would take it easy in winding down the financial support — and would be even more careful in lifting interest rates — but offered no timetable for doing so.
Observers say a strong jobs reading would likely mean the Fed would move sooner than later.
The S&P 500 and Nasdaq on Wall Street finished at fresh records after the latest figures, and the buying filtered through to Asia and some of Europe.
Tokyo stocks jumped more than two percent after Yoshihide Suga said he will not run for his ruling party’s leadership, effectively ending his tenure as premier and throwing wide open the race to succeed him.
Analysts said the gains were fuelled by hopes the next leader will push for a huge spending package to support the virus-hit economy. Suga’s rival in the race for the post last year, Fumio Kishida, on Thursday called for tens of trillions of yen in spending to battle the coronavirus pandemic.
Sydney, Seoul, Wellington, Taipei, Manila, Mumbai, Bangkok and Jakarta also rose.
But Hong Kong and Shanghai fell, with tech firms hurt by Alibaba’s donation of more than $15 billion to charitable causes after Chinese President Xi Jinping called for the rich to do more to tackle inequality.
Alibaba, which has been a key target of Beijing’s drive against high-flying tech firms, said it would put the money to “common prosperity” schemes.
– Key figures around 1020 GMT –
London – FTSE 100: UP 0.1 percent at 7,172.27 points
Frankfurt – DAX 30: UP 0.1 percent at 15,850.38
Paris – CAC 40: DOWN 0.3 percent at 6,742.37
EURO STOXX 50: DOWN 0.1 percent at 4,226.96
Tokyo – Nikkei 225: UP 2.1 percent at 29,128.11 (close)
Hong Kong – Hang Seng Index: DOWN 0.7 percent at 25,901.99 (close)
Shanghai – Composite: DOWN 0.4 percent at 3,581.73 (close)
New York – Dow: UP 0.4 percent at 35,443.82 (close)
Euro/dollar: DOWN at $1.1872 from $1.1875
Pound/dollar: UP at $1.3835 from $1.3833
Euro/pound: DOWN at 85.81 pence from 85.85 pence
Dollar/yen: DOWN at 109.97 yen from 109.94 yen
West Texas Intermediate: UP 0.2 percent at $70.10 per barrel
Brent North Sea crude: UP 0.5 percent at $73.39 per barrel
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