LONDON: Europe’s main stock markets were mixed Friday as US jobs data pointed to a possible soft patch for the world’s top economy, dealers said.
Eagerly-awaited non-farm payrolls (NFP) numbers missed analysts’ forecasts but “fit into the current market narrative” that the US Federal Reserve will cut interest rates this month, Markets.com analyst Neil Wilson said.
Interest rate cuts normally boost share prices.
Asian indices had risen earlier in the day on news that the United States and China are to resume high-level trade talks in October.
In New York, trading got off to a slow start, with the Dow Jones index adding 0.1 percent in early exchanges.
On foreign exchanges the pound held above $1.23 on the brighter prospect that Britain could avoid crashing out of the European Union with no deal next month.
In Washington, the US Bureau of Labor Statistics reported that employers added 130,000 net new positions in August, far fewer than analyst forecasts of around 160,000, while the jobless rate held steady at 3.7 percent and wages rose.
The headline figure included 25,000 temporary jobs related to the upcoming 2020 US Census, which meant that hiring by private employers was that much weaker.
The NFP numbers suggest US economic activity is slowing down, reinforcing expectations of more and/or bigger interest rate cuts by the US Federal Reserve this year.
The data also showed a slight gain in wages “that indicates inflationary pressures may start to creep up on the Fed,” Wilson noted.
“This is perhaps the largest area for concern for equity markets within this report, albeit still nothing to induce panic,” he said.
– Shot in arm –
Meanwhile, after a tumultuous August, dealers got a shot in the arm this week from news that Beijing and Washington are to resume trade talks next month.
China’s commerce ministry said Vice Premier Liu He, Beijing’s point man on trade, agreed to October talks in a call with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.
This week also saw China flag plans for fresh economy-boosting measures.
“In recent months, there has been a lot of tough talk from both sides, but the prospect of the two sides sitting down, and holding trade talks has lifted sentiment,” said David Madden, market analyst at CMC Markets UK.
“The trade spat has been going on for well over a year, and it is unlikely to be wrapped up soon, but at the moment things are going in the right direction.”
In Asia, Hong Kong finished up 0.7 percent, with dealers seeming to brush off news that Fitch had downgraded its sovereign debt rating citing the sometimes violent protests in the financial hub.
Observers said the region’s markets might calm down as China prepares for a week-long holiday to mark the 70th anniversary of the Communist Party’s coming to power on October 1.
– Key figures around 1330 GMT –
London – FTSE 100: DOWN 0.1 percent at 7,264.27 points
Frankfurt – DAX 30: UP 0.4 percent at 12,179.45
Paris – CAC 40: FLAT at 5,592.08
EURO STOXX 50: UP 0.1 percent at 3,488.83
Pound/dollar: DOWN at $1.2319 from $1.2334 at 2100 GMT
Euro/pound: UP at 89.71 pence from 89.46 pence
Euro/dollar: UP at $1.1051 from $1.1035
Dollar/yen: DOWN at 106.77 yen from 106.94 yen
Tokyo – Nikkei 225: UP 0.5 percent at 21,199.57 (close)
Hong Kong – Hang Seng: UP 0.7 percent at 26,690.76 (close)
Shanghai – Composite: UP 0.5 percent at 2,999.60 (close)
New York – Dow: UP 0.1 percent at 26,766.28
Brent North Sea crude: DOWN $1.05 at $59.90 per barrel
West Texas Intermediate: DOWN $1.13 at $55.17