Asia stocks gain, Europe flat before jobs report

[November 05, 2010]  BANGKOK (AP) -- Asian stock markets climbed Friday and European shares were flat ahead of a U.S. jobs report that could take some wind out of the rally triggered by the Fed's $600 billion bond buying spree.

The Federal Reserve's latest attempt to lower long-term interest rates to boost sluggish growth sent investors flocking to stocks and commodities in Asia for a second day in search of higher returns. But European markets were muted in early trading.

Oil jumped above $87 a barrel to its highest level since early May but later gave back some of those gains.

The focus of investors was turning to the U.S. jobs report for October which is expected to show that high unemployment remains a brake on the world's biggest economy.

Economists expect the Labor Department to report that employers added just 60,000 jobs, fewer than the 100,000 needed to keep pace with population growth -- and far fewer than the 200,000 needed to start returning the 15 million unemployed Americans to work. The unemployment rate is expected to remain 9.6 percent for a third straight month.

In early European trading, Germany's DAX was up less than 0.1 percent to 6,736.58 and Britain's FTSE 100 was flat at 5,861.64. France's CAC-40 was fractionally higher at 3,817.74.

Wall Street was set to fall. Dow futures were down 17 points, or 0.2 percent, at 11,370.00. Broader S&P futures shed 2.6, or 0.2 percent, to 1,216.00.

The strong gains in Asia's markets came after U.S. shares closed at their highest level since just before Lehman Brothers collapsed in 2008.

Japan's benchmark Nikkei 225 stock index soared 267.21 points, or 2.9 percent, to 9,625.99 and Australia's S&P/ASX 200 added 1.2 percent to 4,800.60.

Hong Kong's Hang Seng index climbed 1.4 percent to 24,876.82 and China's Shanghai Composite Index rose 1.4 percent to 3,129.50.

Shares in India, Singapore and Taiwan were all higher while South Korea's Kospi slipped 0.2 percent to 1,938.96.

In New York on Thursday, the Dow Jones industrial average surged 219 points, or 1.9 percent, to close at 11,434.84, the highest closing level since just before Lehman Brothers went under in September 2008, triggering the global financial crisis.

The Federal Reserve's decision Wednesday to spend $600 billion buying Treasury bonds over the next eight months in an attempt to spur economic growth is expected to lower long-term interest rates, making stocks a more attractive investment.

The move has also boosted the prices of commodities like oil since expectations the Fed would increase the money supply have weakened the dollar, which is the currency most commodities are traded in. A weaker dollar makes commodities more attractive to investors holding other currencies.

In currencies, the dollar fell to 80.69 yen from 80.73 yen in New York late Thursday. The euro fell to $1.4194 from $1.4211

Benchmark crude for December delivery was up 20 cents at $86.67 a barrel in electronic trading on the New York Mercantile Exchange after earlier reaching $87.22.

[Associated Press]

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