World markets edge higher ahead of US jobs data

[February 04, 2010]  LONDON (AP) -- World stocks advanced Friday ahead of crucial U.S. unemployment data which some hope will show that the world's largest economy created jobs in December for the first time in two years.

In Europe, the FTSE 100 index of leading British shares was up 2.61 points, or 0.1 percent, at 5,529.33 while Germany's DAX rose 23.88 points, or 0.4 percent, to 6,043.24. The CAC-40 in France was 24.43 points, or 0.6 percent, higher at 4,049.23.

Earlier in Asia, Japanese shares led the way, with the Nikkei 225 stock average rising 116.66 points, or 1.1 percent, to 10,798.32.

Wall Street was also poised to open modestly higher but everything could quickly change once the nonfarm payrolls data are out an hour before the bell. At the moment, Dow futures were up 14 points, or 0.1 percent, at 10,559 while the broader Standard & Poor's 500 futures rose 0.9 point, or 0.1 percent, to 1,138.40.

Many market participants reckon the figures could show jobs rising for the first time in two years.

"Rarely has a piece of data ever been so eagerly awaited," said David Buik, markets analyst at BGC Partners.

The consensus in the markets at the moment is that around 10,000 jobs were shed during December, following November's much smaller than anticipated 11,000 fall.

"The last release of this data came in much better than expected, so today's number is arguably even more important than usual -- it should help markets decide if November marked an important turning point for the rate of U.S. unemployment," said David Jones, chief market strategist at IG Index.

The key driver to stock market performance, at least in the first part of the year, will likely be whether the economic figures, particularly out of the U.S., back up the optimism that is evident in company valuations following a near ten month bull run.

Stock markets around the world have rallied strongly since March's lows -- the Dow and the S&P 500 for example surged more than 60 percent since then -- as investors grew more optimistic about the global economic recovery after central banks and governments pushed through extraordinary policy measures to mitigate the deepest recession since World War II.

Elsewhere in Asia, South Korea's Kospi added 0.7 percent to 1,695.26 as the Bank of Korea left its key interest rate at a record low after the government muscled in on the central bank's policy meeting.

Australia's market rose 0.3 percent and Taiwan's index was up 0.5 percent.

Chinese stocks recovered their early losses, with the Shanghai index closing up 0.1 percent at 3,196.00 and Hong Kong's Hang Seng ticking up 0.1 percent to 22,296.75.

Investors there were rattled Thursday after China's central bank slightly raised the interest rate on its three-month bills, heightening concerns the government would restrain the liquidity that's buoyed asset prices over the last year.

Oil prices fell, with benchmark crude for February delivery down 26 cents to $82.40 a barrel. On Thursday, the contract fell 52 cents to settle at $82.66.

The dollar was steady at 93.25 yen while the euro fell 0.1 percent at $1.43.

As in the stock markets, all eyes in the currency markets will be on the jobs data later.

"If these figures come in as expected the market should continue to take the dollar higher," said Michael Hewson, an analyst at CMC Markets.

The dollar has rallied over the last month or so partly because of mounting optimism about the pace of the U.S. economic recovery in the wake of November's jobs data.

[Associated Press; By PAN PYLAS]

AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.

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