World markets mostly down ahead of US jobs report

[December 05, 2008]  BERLIN (AP) -- World markets were mostly lower Friday as caution ahead of a critical reading on the U.S. jobs market offset any optimism caused by major rate cuts Thursday by European central banks. Oil continued to trade at near four-year lows.

In Europe, where the European Central Bank levied its biggest rate cut in its 10-year history on Thursday, major exchanges were dipping lower including Germany's DAX-30 Index down 2.4 percent at 4.453.32.

Any joy over the ECB's decision to cut its interest rate to 2.5 percent from 3.25 percent was muted by the German Bundesbank's forecast that Europe's biggest economy will shrink 0.8 percent next year.

Similar gloom was found in Britain, where the FTSE-100 was down 1.2 percent 4,113.98 in late-morning trading, despite the Bank of England's decision Thursday to cut its benchmark refinancing rate to 2 percent.

France's CAC-40 was down nearly 2.8 percent to 3,074.25 and the Swedish stock exchange dropped 2 percent to 192.58, in spite of a 1.75 percent cut by the Swedish Riksbank to 2 percent.

In Tokyo, Japan's Nikkei 225 average ended the week with a whimper, closing down 6.73 points, or 0.1 percent, at 7,917.51 as investors wavered between hunting for bargains and staying cautious ahead of the U.S. employment report later Friday.

Elsewhere in Asia, Hong Kong's Hang Seng index advanced 2.5 percent to 13,846.09 and South Korea's Kospi climbed 2.1 percent to 1,028.13 but markets in Australia, Taiwan, Indonesia, New Zealand, the Philippines and Malaysia retreated.

"There is no major funding going into the market, so it is losing momentum," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong, where turnover was light. "Major investors are still staying on the sidelines," he said.

On Wall Street Thursday, the Dow Jones industrial average slid 215.45 points, or 2.5 percent, to 8,376.24.

The number of Americans claiming unemployment benefits last week reached its highest level in 26 years, while factory orders plunged a bigger-than-expected 5.1 percent in October. The U.S. Labor Department unemployment report due Friday was expected to show the jobless rate rose to 6.8 percent in November as companies slashed 320,000 jobs.

Wall Street futures pointed to falls in the U.S. on Friday with Dow futures down 10 points, or 0.1 percent, at 8391 and S&P500 futures down 2.5 points, or 0.3 percent, at 845.

Chinese shares rebounded from early weakness, with the benchmark Shanghai Composite Index rising 0.9 percent to 2,018.66. The Shenzhen Composite Index rose 2.3 percent.

Australia's All Ordinaries index slipped 1.2 percent as resource shares fell on expectations of falling demand. Mining giant BHP Billiton tumbled 4.9 percent and Woodside Petroleum was down 2.1 percent.

Light, sweet crude for January delivery was up 60 cents at $44.27 a barrel in electronic trading on the New York Mercantile Exchange by late morning in Europe. The contract fell overnight $3.12 to settle at $43.67, the lowest since January 2005.

[Associated Press; By MATT MOORE]

AP Business Writers Elaine Kurtenbach in Shanghai and Tomoko Hosaka in Tokyo contributed to this report.

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