Stocks lower but heading for weekly gain ahead of US jobs data
LONDON, Oct. 8 (Reuters) – European stocks fell on Friday, but retained most of the gains from the previous session as investors welcomed the temporary lifting of the debt ceiling by the U.S. Senate and awaited crucial data on the job expected later in the session.
Thursday’s rally propelled global stock indices into positive territory for the week, despite widespread selling initially as investors worried about soaring energy prices and the prospect of higher interest rates. faster than expected to fight inflation.
Still, the mood remains nervous – oil prices rebounded again to multi-year highs and government bond yields climbed early in Friday’s session.
At 08:20 GMT, the Euro STOXX 50 (.STOXX50E) was 0.23% weaker, while the German DAX (.GDAXI) fell by a similar amount. The UK FTSE 100 (.FTSE) rose 0.1%.
The MSCI World Stock Index (.MIWD00000PUS), which tracks stocks from 50 countries, was unchanged on that day and is now up 0.8% for the week. The index is 4.4% from its record level reached in early September.
Wall Street futures showed a small drop at the opening.
Jim Reid, strategist at Deutsche Bank, said “the markets have been turbulent but not completely rocked this week.”
He said the rebound had been “thanks to the short-term resolution of the US debt ceiling and lower gas prices, which eliminated two of the biggest risks for investors in the past two weeks.” .
In Asia, the main benchmark was supported by advances in Chinese blue chips (.CSI300) which rose 1.07% as trading resumed after the National Day holiday week. The improvement in sentiment is partly due to a private sector survey that showed activity in China’s service sector resumed growth in September. Read more
Over the past three months, Chinese stocks have been hit by regulatory crackdowns, real estate turmoil over China Evergrande and its massive debt, and more recently power shortages, but some investors are now starting. to see a buying opportunity.
However, bonds and stocks issued by Chinese real estate companies collapsed on Friday with no sign of a resolution to the debt problems of cash-strapped Evergrande (3333.HK), which affects sentiment in the sector at large. Read more
The sense of risk was bolstered by the approval by the US Senate of legislation to temporarily raise the federal government’s debt limit and avoid the risk of a historic default, although it postponed until early December a decision on a more lasting remedy. Read more
The vote sparked a massive selloff in U.S. government bonds, and 10-year U.S. Treasury yields hit 1.6%, their highest level since mid-June, when they hit the same level.
Traders are also awaiting US payroll data for September. They expect near-consensus jobs figures to lead the Federal Reserve to indicate at its November meeting when it will start scaling back its massive stimulus package.
According to a Reuters survey of economists, non-farm payrolls likely increased by 500,000 jobs last month, which would leave the employment level of around 4.8 million jobs below its peak of February 2020. read more
ABC analysts said it was possible that the jobs data might surprise on the downside, but “we think it would take a bigger failure than expected to stop the [Federal Reserve] to announce a cone in November. “
They said a strong impression of the payroll would support the US dollar as it would signal an impending decline.
The US dollar index edged up to 94.291 not too far from a 12-month high of 94.504 reached in late September.
Oil prices have risen on signs that some industries have started to switch from high priced gas to oil and on doubts that the US government will release oil from its strategic reserves at this time.
Brent crude rose 1.4% to $ 83.09 a barrel, returning to a three-year high of $ 83.47 reached earlier in the week, while U.S. crude gained 1.46% to 79 , $ 45 a barrel, approaching its seven-year high of $ 79.78 also hit this week.
Additional reporting by Alun John in Hong Kong; Editing by Kim Coghill
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