Stocks Head for Weekly Gain Ahead of US Jobs Data

The offices of the London Stock Exchange Group can be seen in the City of London, Great Britain on December 29, 2017. REUTERS / Toby Melville / File Photo

LONDON, Oct. 8 (Reuters) – Stock markets 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 US Senate and awaited crucial data on the job expected later.

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 to multi-year highs and government bond yields climbed early in Friday’s session.

At 11:15 GMT, the Euro STOXX 50 (.STOXX50E) was 0.23% weaker, while the German DAX (.GDAXI) fell 0.12%. The UK FTSE 100 (.FTSE) remained unchanged.

The MSCI Global Equity Index (.MIWD00000PUS), which tracks stocks in 50 countries, rose 0.06% and is now up 0.8% for the week. But the index is more than 4% of its record reached in early September.

Global Equities

Wall Street futures showed a small gain at the opening.

“There is so much liquidity out there and there is no alternative to stocks, so whenever there is a pullback, the buy-the-dip kicks in.” Fahad Kamal said , CIO at Kleinwort Hambros.

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 triggered a massive selloff in U.S. government bonds, and 10-year U.S. Treasury yields hit 1.6%, their highest level since June, when they hit the same level.

Traders are also awaiting US payroll data for September. They say anything but a significant surprise in the jobs data will 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

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 1.31% 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 US dollar index was little changed at 94.161, but not 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 the US government will release oil from its strategic reserves at this time.

Brent crude rose 0.71% to $ 82.53 a barrel, down from its day highs but even closer to a three-year high of $ 83.47 hit earlier in the week. US crude rose 0.72% to $ 78.88 a barrel, approaching its seven-year high of $ 79.78 also hit this week.

Additional reports by Sujata Rao; Editing by Kim Coghill and Chizu Nomiyama

Our Standards: Thomson Reuters Trust Principles.

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