Global shares snap losing
streak as oil ends its decline
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[September 01, 2016]
By Marc Jones
LONDON (Reuters) - Gains in Europe
helped pull world shares out their longest losing streak of the year
on Thursday, as oil prices ticked up before key U.S. jobs data.
Markets were juggling a host of issues, including lackluster data
from Asia's two biggest economies, the ousting of Brazil's president
and signs that Spain's political impasse would continue.
Nevertheless, risk appetite was slowly re-emerging.
Europe's main stock markets gained 0.4 to 0.7 percent to help MSCI's
All World index end six days of losses, its longest since the start
Commodity companies were among the leaders as oil took back some of
the 8 percent it had lost this week, a decline that accelerated on
Wednesday after data showed U.S. crude and distillate stockpiles
increased more than expected.
Brent crude futures rose to $47.08 per barrel, after falling
almost 3 percent overnight. U.S. crude gained 0.5 percent to
$44.92 after shedding 3.6 percent on Wednesday. Its gain for August
was 7 percent.
After the disappointing data from Asia, European surveys showed euro
zone manufacturing growth slowed, although Britain staged one of its
sharpest rebounds on record as factories recovered from June's vote
to leave the European Union.
The pound rose more than a cent to $1.3250, which put it on course
for its best day in two weeks.
"(British) companies reported that work that had been postponed
during July had now been restarted, as manufacturers and their
clients started to regain a sense of returning to business as
usual," Markit economist Rob Dobson said.
The British data also helped to nudge European bond yields higher.
Spanish government bond yields touched a three-week high of 1.026
percent after acting Prime Minister Mariano Rajoy lost a vote of
confidence in parliament, raising the prospect of a third election
in a year.
FOCUS ON JOBS
Friday's U.S. nonfarm payrolls report remains this week's market
focus, after Federal Reserve Vice Chair Stanley Fischer said last
week the jobs data will be a factor in the timing of central bank
interest rate hikes.
Employers are expected to have added 180,000 jobs in August,
according to the median estimate of 89 economists polled by Reuters.
The ADP National Employment Report on Wednesday showed U.S. private
employers adding 177,000 jobs in August, above the 175,000 forecast
by a Reuters survey of economists, and contracts to buy previously
owned homes surged in July,
The dollar's gains were tempered after the Institute for Supply
Management-Chicago said its business barometer dropped 4.3 points to
51.5 in August, short of expectations.
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A man looks at an electronic board showing market indices outside a
brokerage in Tokyo, Japan, March 2, 2016. REUTERS/Thomas Peter
Spot gold slipped 0.1 percent to $1,307.80 an ounce, moving back toward its
overnight low of $1,304.91, which was its lowest level since June 24.
In Asia overnight, MSCI's broadest index of Asia-Pacific shares outside Japan
ended down 0.2 percent, while Australia's S&P/ASX 200 index shed 0.3 percent.
One of the drags was private-sector data showing that Chinese manufacturing
activity stagnated in August. Growth in output and new orders slowed and
companies shed staff for the 34th month in a row.
In Japan, manufacturing activity showed signs of steadying, but the HIS Markit/Nikkei
PMI remained below the 50 mark that separates expansion from contraction, edging
up to 49.5 in August from 49.3 in July.
Output grew for the first time in six months, but export orders fell again,
bolstering expectations the Bank of Japan will need to offer more stimulus to
revive the sputtering economy.
Japan's Nikkei stock index ended up 0.2 percent.
The dollar was up 0.1 percent at 103.51 yen, not far from Wednesday's 103.54,
its highest in more than month. The euro slipped to $1.1148.
"There are still some skeptics who are still not convinced that the Fed will
take action (on rates) again this year," said Antje Praefcke, currency
strategist at Commerzbank.
"They have been misled by the Fed one too many times over the past few months in
their hope for a rapid rate hike cycle following the lift-off."
(Additional reporting by Lisa Twaronite in Tokyo and Anirban Nag in London)
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