Manila, Sep 5 (AP) World shares rose on Friday after US stocks climbed to a record as Wall Street made its final moves ahead of an update on the American job market that could clear the way for cuts to interest rates that investors love.
In early European trading, Germany’s DAX index added 0.2 per cent to 23,815.68, while Britain’s FTSE 100 rose 0.3 per cent to 9,246.59. In Paris, the CAC 40 edged up 0.1 per cent to 7,707.13.
The future for the S&P 500 rose 0.3 per cent while that for the Dow Jones Industrial Average was up 0.1 per cent.
In Tokyo, the Nikkei 225 added over 1 per cent to 43,018.75 after data released on Friday showed Japan’s labour cash earnings rose 4.1 per cent year-on-year in July, up from 3.1 per cent in June. Another report showed household spending climbed 1.4 per cent in July from the same month a year ago, marking growth for the third month in a row.
President Donald Trump also signed an executive order on Thursday implementing the US trade deal with Japan, negotiated in July, with lower tariffs on Japanese car imports.
“Solid wage growth is likely to support recovery in spending and sustainable inflation,” ING Economics said in a commentary, adding Friday’s data reinforces its expectation that the Bank of Japan will hike rates in October.
Chinese markets rebounded after three days of decline. Hong Kong’s Hang Seng index jumped 1.5 per cent to 25,434.93, while the Shanghai Composite index added 1.2 per cent to 3,812.51.
South Korea’s Kospi edged up 0.1 per cent to 3,205.12, and Australia’s S&P/ASX 200 rose 0.5 per cent to 8,871.20.
Taiwan’s Taiex jumped 1.3 per cent, while India’s BSE Sensex bucked the trend, falling less than 0.1 per cent.
On Wall Street on Thursday, the S&P 500 added 0.8 per cent to top the all-time high it set last week. The Dow Jones Industrial Average rose 350 points, or 0.8 per cent, and the Nasdaq composite gained 1per cent.
Stocks got some lift from easing pressure from the bond market, where Treasury yields fell following the latest reports on the US job market, which came in worse than economists expected. One report suggested employers, not including the government, nearly halved their hiring in August from the prior month. Another said that more workers applied for unemployment benefits last week, an indication of rising layoffs.
Neither number is flashing a recession, and a third report on activity for businesses in the information and other services industries showed stronger-than-expected growth.
The upside for investors of a slowdown in the job market is that it could push the Federal Reserve to cut its main interest rate for the first time this year at its next meeting in a couple of weeks. Such cuts can kickstart the economy and job market, though they can also accelerate inflation.
So far this year, the Fed has kept its main interest rate on hold because it’s been more worried about inflation potentially worsening because of Trump’s tariffs than about the job market.
A more comprehensive report on the job market’s health during August will arrive on Friday from the US Labour Department, and it will likely carry much weight with the Fed. Ahead of it, the yield on the 10-year Treasury fell to 4.16 per cent from 4.22 per cent on late Wednesday.
In other dealings on Friday, benchmark US crude lost 38 cents to USD 63.10 per barrel. Brent crude, the international standard, slid 32 cents to USD 66.67 per barrel.
The US dollar slipped to 148.14 Japanese yen from 148.40 yen. The euro rose to USD 1.1682 from USD 1.1654. (AP) SKS RD RD
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