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Stocks up as investors turn attention to US jobs

Stocks up as investors turn attention to US jobs

Global stocks were buoyant Wednesday despite concerns over Japan's nuclear crisis, as investors turned their gaze to a U.S. jobs report at the end of the week.
After focusing for weeks on Japan's devastating earthquake and tsunami as well as the uprisings in the Arab world, traders are paying closer attention to fundamental economic trends. Among the most important are the pace of jobs creation in the U.S. and when the Federal Reserve will start raising interest rates from super-low levels.
The most important piece of economic data this week will be Friday's U.S. nonfarm payrolls report for March. The figures often set the stock market tone for a week or two after their release. They could have an even bigger impact this time as investors gauge when the Fed will begin tightening monetary policy.
Recent comments from Fed officials have indicated that interest rates may rise sooner than the markets had previously been anticipating. That has been reflected in the recent subdued performance in U.S. Treasuries.
At the moment the consensus in the markets is that payrolls rose by 190,000 during March but that the unemployment rate, which is based on a separate survey, was unchanged at 8.9 percent.
Figures from the ADP payrolls firm did little to alter expectations. The 201,000 increase in private payrolls reported by ADP was more or less in line with market expectations for a 210,000 rise.
"The result was close to expectations and is overall a positive sign ahead of the official payrolls report on Friday," said Vassili Serebriakov, an analyst at Wells Fargo Bank.
The figures kept stock markets in Europe and the U.S. supported.
In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 5,960 while Germany's DAX rose 1.7 percent to 7,053. The CAC-40 in France was 0.9 percent firmer at 4,025.
In the U.S., the Dow Jones industrial average was up 0.5 percent at 12,336 soon after the open while the broader Standard & Poor's 500 index rose 0.4 percent to 1,325.
The prevailing view in the markets is that the Fed won't start to raise its main interest rate from the current 0-0.25 percent range unless there is clear evidence that employment is increasing and that the unemployment rate is heading down to 7 percent.
The dollar's fortunes this year will likely hinge to a large extent on what happens to U.S. interest rates. One of the reasons why the dollar has underperformed over the past few months is the expectation that other central banks, such as the European Central Bank and the Bank of England, will be tightening policy sooner than the Fed.
"The March ADP employment report hints at a firm reading on private sector jobs on Friday, which would reinforce a more positive tone in the dollar," said Wells Fargo's Serebriakov.
By mid-afternoon London time, the dollar was up 0.8 percent at 83.06 yen while the euro was 0.4 percent lower at $1.4065.
The euro was hurt somewhat by figures showing economic confidence in the 17 countries that use the euro slipped in March. Eurostat, the EU's statistics office, revealed that its main economic sentiment indicator fell 0.6 points to 107.3. Though the fall was bigger than anticipated and the sharpest decline since May 2010, the indicator remains at relatively high levels.
Earlier in Asia, Tokyo's benchmark Nikkei 225 index rose 2.6 percent to 9,708.79, its highest level since March 11, when the post-earthquake tsunami smashed into the country's northeast _ upending cities, killing thousands of people and causing a nuclear power plant to malfunction and leak toxic radiation.
The Nikkei was boosted by a steadily weakening yen and data showing the country's industrial production climbed for the fourth straight month in February. Still, the government warned that industrial output would fall sharply as the effects of the tsunami and the earthquake were felt.
Elsewhere, Hong Kong's Hang Seng index rose 1.7 percent to 23,451.43, South Korea's Kospi added 0.9 percent to 2,091.38. Shares in Singapore, Taiwan and New Zealand were also higher. Australia's S&P/ASX 200 rose 1.4 percent to 4,822.20.
Bucking the trend were indexes on mainland China. The Shanghai Composite Index dropped slightly to 2,955.77, and the smaller Shenzhen Composite Index declined 0.8 percent to 1,264.59.
In the oil markets, the focus remained very much on Libya, where forces loyal to longtime leader Moammar Gadhafi pushed rebels back. There is a growing feeling that the rebels may not be able to oust Gadhafi militarily unless already contentious international airstrikes go further in taking out his forces.
The uncertainty kept oil prices elevated _ Libya accounts for a little under 2 percent of global oil production.
A barrel of crude on the New York Mercantile Exchange was down 52 cents at $104.27 while the equivalent Brent rate in London fell 9 cents to $114.87.
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Pamela Sampson in Bangkok contributed to this report.


Updated : 2021-10-26 12:51 GMT+08:00