World stocks buoyed by U.S. jobs picture
Asian stock markets rose sharply in early trading Monday, boosted by stronger-than-expected U.S. hiring figures for July following three months of weak job gains. / AP Photo/Shizuo Kambayashi
(AP) LONDON - Financial markets started the new week in optimistic mood Monday after stronger-than-expected U.S. hiring for July continued to buoy sentiment.
With little scheduled economic news due, last Friday's figures showing the U.S. economy adding 163,000 jobs in July continue to drive sentiment. Though the figures eased concerns over the world's largest economy, the rise in the unemployment rate to 8.3 percent provided more evidence, if any were needed, that the recovery is patchy.
The figures were welcomed after three months when payrolls failed to meet expectations. The data also helped markets clamber off lows registered on Thursday when investors were initially disappointed by comments from European Central Bank president Mario Draghi.
"Those bumper non-farm payroll figures on Friday seem to be providing markets with a lasting distraction from the ongoing woes of the eurozone," said Fawad Razaqzada, market strategist at GFT Markets.
In Europe, Germany's DAX was up 0.7 percent at 6,913 while the CAC-40 in France rose 0.5 percent to 3,392. The FTSE 100 index of leading British shares was 0.1 percent higher at 5,791.
Wall Street was poised for a solid opening too with both the Dow futures and the broader S&P 500 futures up 0.1 percent.
Also helping to shore up markets has been a reassessment of Draghi's comments last Thursday. Though his comments fell short of some market expectations, investors have concluded that Draghi has paved to more intervention in the bond markets.
"If last week's events were important in one respect, they were an admission by the ECB that inaction was no longer an option, and while the undertaking to act is indeed welcome, the intention so far remains only verbal," said Michael Hewson, markets analyst at CMC Markets.
Spanish Prime Minister Mariano Rajoy came the closest Friday to acknowledging that he has considered a sovereign bailout for the country when he told reporters he would consider asking for financial aid for his country only once the ECB had fleshed out its crisis-fighting plans for buying government bonds.
Rajoy's statement and the reassessment of Draghi's action helped Spain's 10-year yield Monday to dip further below the 7 percent threshold that is widely considered unsustainable in the long-run. It's down a further 0.12 percentage points to 6.71 percent, having spiked up above 7 percent in the aftermath of Draghi's comments.
And the euro was steady having recovered the losses it posted following Draghi's comments on Friday. It was down 0.2 percent at $1.2362.
A weekend statement by the People's Bank of China indicating it would intensify policy fine-tuning also helped investment sentiment in Asia earlier.
That was among factors helping to lead Asian stock markets sharply higher.
Japan's Nikkei 225 index rose 2 percent to finish at 8,726.29 and Hong Kong's Hang Seng climbed 1.7 percent to 19,998.72. South Korea's Kospi added 2 percent to 1,885.88.
Oil markets were steady having pushed above $90 a barrel on Friday. Benchmark crude was down 26 cents at $91.14 a barrel in electronic trading on the New York Mercantile Exchange.
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