US stocks, oil prices fall as jobs report disappoints

LONDON: Wall Street, oil prices and the dollar were down on Wednesday as a disappointing private jobs report and the coronavirus Delta variant weighed on investor sentiment.

European stock markets rose but pared earlier gains as the Dow opened lower after a report showed that hiring by American firms had been far smaller than expected in July.

Hiring slowed to 330,000 last month, with dramatically lower gains in the construction and leisure and hospitality sectors, according to payroll services firm ADP.

The jobs report "has brought peak economic and earnings growth concerns back into play", according to Schwab analysts.

Asian stock markets mostly advanced following Tuesday's latest record close for the S&P 500 on Wall Street.

China shares rise on tech sector bounce; Hong Kong gains

Markets have cheered a series of strong company earnings in recent weeks but the lacklustre US job reports and the growing threat of the Delta variant, which prompted China to tighten travel restrictions, have raised concerns.

Crude oil prices fell by more than two percent while the dollar was down against major currencies.

The oil market has fretted over concerns that crude demand in China could tumble as a result of the tough new lockdown measures.

Oil slumps 4pc on concerns over demand and OPEC supply boost

"The fact that the Delta variant of the coronavirus is spreading fast is increasingly worrying, as the latest news alters the prospects of economic recovery, especially if governments decide to move toward stricter lockdown measures to break the transmission chains," said Ipek Ozkardeskaya, senior analyst at online bank Swissquote.

The main worry surrounds the world's second biggest economy China, where millions of people have been put into lockdown.

The country had brought domestic cases of the coronavirus down to virtually zero after the disease first emerged in Wuhan in late 2019, but it is now facing its worst outbreak in months.

"While China's resolve to control outbreaks has been well illustrated, markets will continue to watch the outbreak given the high transmissibility of the Delta variant," said National Australia Bank's Tapas Strickland.

"There are also concerns China's domestic vaccines are less effective against the Delta variant."

Investors meanwhile continue to fret over China's crackdown on a range of sectors including tech, private tuition, and property.

There is a fear that gaming firms could be next after a state-run media article described online games as "spiritual opium".

Tencent, which has been hammered by the latest government moves, rose more than two percent Wednesday on bargain-buying though it is still down more than 20 percent since the start of last month.

Alibaba, another firm caught in the regulatory sweep, slipped slightly after announcing revenues fell short of forecasts for the first time in two years.

Key figures around 1520 GMT

New York - Dow: DOWN 0.4 percent at 34,991.15

London - FTSE 100: UP 0.1 percent at 7,114.89 points

Frankfurt - DAX 30: UP 0.4 percent at 15,615.55

Paris - CAC 40: UP 0.2 percent at 6,739.36

EURO STOXX 50: UP 0.3 percent at 4,130.65

Tokyo - Nikkei 225: DOWN 0.2 percent at 27,584.08 (close)

Hong Kong - Hang Seng Index: UP 0.9 percent at 26,426.55 (close)

Shanghai - Composite: UP 0.9 percent at 3,477.22 (close)

Euro/dollar: UP at $1.1897 from $1.1868 at 2045 GMT

Euro/pound: UP at 85.27 pence from 85.25 pence

Pound/dollar: UP at $1.3952 from $1.3916

Dollar/yen: DOWN at 108.77 yen from 109.05 yen

Brent North Sea crude: DOWN 2.0 percent at $70.95 per barrel

West Texas Intermediate: DOWN 2.6 percent at $68.72 per barrel