World stocks downbeat before US jobs data

World stocks downbeat before US jobs data
AFP
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First Published: Fri, Apr 03 2009. 03 07 PM IST
Updated: Fri, Apr 03 2009. 03 07 PM IST
London: European stock markets dipped and Asian equities were mixed on Friday as investors tread cautiously before the release of key US jobs data, traders said, following a surge sparked by the G20 summit.
World indices had soared Thursday as leaders of the Group of 20 rich and emerging economies unveiled massive financial help to tackle the worst downturn since the 1930s.
“There’s certainly the scope however for more dips lower in the medium term and the fact that we’ve got the (US) non-farm payrolls later today could be precisely the sort of trigger that could initiate some quick profit taking ahead of the weekend break,” said CMC Markets dealer Matt Buckland.
In early European stock market trade, London dropped 0.19%, Frankfurt slid 0.31%, Paris gave up 0.19% and Madrid lost 0.26%.
World stocks had rocketed Thursday, with Frankfurt winning around six percent and the Dow Jones Industrial Average climbing 2.79% on Wall Street, following the G20 summit pledge to boost efforts to fight a deepening recession.
In Asia on Friday, Tokyo closed up 0.34% to near a three-month high, Shanghai fell 0.23% and Sydney ended 1.51% higher. Hong Kong’s Hang Seng Index closed 0.16% higher.
While the G20 summit stopped short of unveiling fresh fiscal spending to tackle the global economic slump, it did provide more than a $3 trillion of new money to help poorer countries and a vow to increase global regulation.
Stocks on Thursday also won support from revamped US accounting rules that could ease financial pressure on banks, traders said.
“Potentially, this change in accounting standards could see as much as 20% added to earnings in the second quarter for US banks,” said IG Markets analyst Ben Potter.
“A strong global banking system will complement our already solid domestic financial system. Bit by bit, the pieces of the puzzle are falling into place. This will ultimately lead to stabilisation of the global financial system,” he added.
Overnight on Wall Street, the Dow Jones Industrial Average closed at 7,978.08 points after breaching the psychological 8,000 barrier for the first time since 13 February as the market rallied for the third consecutive day.
The tech-heavy Nasdaq composite added 3.29% and the broad-market Standard & Poor’s 500 index climbed 2.87%.
“It seems that the bulls have once again assumed control on Wall Street, with hopes growing that a potential bottom to the bear market has been reached,” said Joseph Hargett of Schaeffer’s Investment Research.
With the G20 already seen as old news by markets, attention shifted on Friday to the non-farm payrolls data for March due at 1230 GMT.
“European equities were seen edging lower... with investors braced for key US monthly jobs figures,” said analysts at ODL Capital.
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First Published: Fri, Apr 03 2009. 03 07 PM IST