World stocks rally ahead of key US jobs news

[March 05, 2010]  LONDON (AP) -- World stock markets rose Friday as investors grew more confident about key U.S. jobs data later following some encouraging signals earlier this week and worries about the Greek debt crisis subsided following a successful bond issue.

In Europe, the FTSE 100 index of leading British shares was up 22.11 points, or 0.4 percent, at 5,549.27 while Germany's DAX rose 20.78 points, or 0.4 percent, at 5,816.10. The CAC-40 in France was 19.06 points, or 0.5 percent, at 3,847.47.

Wall Street was also poised for the advance, which started earlier in Asia -- Dow futures were up 17 points, or 0.2 percent, at 10,448 while the broader Standard & Poor's 500 futures rose 2.2 points, or 0.2 percent, to 1,124.50.

However, all that could change if the jobs data deviate too far from consensus -- the jobs data often set the market tone for a week or two after their release.

The consensus in the markets is that the unemployment rate will rise to 9.8 percent in February from 9.7 percent and that non-farm payrolls will have fallen by 50,000, partly because of the heavy snow on the East Coast.

"Anything away from this, as usual will cause a degree of volatility in the major markets," said James Hughes, market analyst at CMC Markets.

A better than expected private payrolls survey from ADP and a bigger than expected fall in weekly jobless claims figures have stoked market hopes that the official government data may impress, hence the modest stock market advance.

Confidence in the markets has also been shored up somewhat by Thursday's successful euro5 billion Greek bond auction, which has eased concerns that the debt-laden country will not be able to raise money in the money markets.

The bond auction has reined in market expectations that a meeting later between Greek Prime Minister George Papandreou and German Chancellor Angela Merkel will yield anything substantially new apart from ongoing vocal support for the Greek government's latest batch of austerity measures, announced on Wednesday.

"Today's meeting is likely to see offers of moral support rather than details of an actual aid program," said Neil Mackinnon, global macro strategist at VTB Capital.

However, the debt crisis is a long way from being over, especially as Greece has to raise another euro20 billion by the end of May to rollover debts.

"We think it is best to treat any 'relief rallies' in the markets -- especially in the euro -- with caution," said Mackinnon.

By late-morning London time, the euro was up 0.1 percent at $1.3590 while the dollar was 0.2 percent firmer at 89.26 yen.

Earlier in Asia, speculation that Japan was mulling extra measures to shore up its recovery added to the upbeat mood. According to a media report, the Bank of Japan might ease monetary policies to keep money flowing through the economy as soon as this month.

Japan's Nikkei 225 stock average jumped 223.24 points, or 2.2 percent, to 10,368.96.

"Investors welcomed the (Bank of Japan) report," said Kazuhiro Takahashi, equity strategist at Daiwa SMBC Securities Co. Ltd. "Investors were speculating that further easing could help the yen weaken."

A soft yen helps Japanese exporters by boosting the value of their repatriated profits and making their goods more competitively priced abroad.

In greater China, Hong Kong's market rose 1 percent to 20,787.97 and Shanghai's market gained 0.3 percent to 3,031.06 as investors focused on Chinese Premier Wen Jiabao's annual policy address.

Wen promised strong growth this year, 8 percent, and said the government will combat inflation and risks to banks to maintain the economy's recovery. While the annual hike in spending increase would be halved, the government would ensure stimulus and easy credit continue because the basis of renewed global growth is still weak, he said.

Elsewhere, South Korea's Kospi was up 1 percent at 1,634.57. Markets in Taiwan and Singapore gained as well.

Oil prices rose with benchmark crude for April delivery up 43 cents at $80.64.

[Associated Press; By PAN PYLAS]

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

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.