A roundup of trading on major world markets:
NEW YORK – US stocks have rallied, giving the S&P 500 its biggest gain since early September, as US jobs data suggests the economy is strong enough to sustain a Federal Reserve rate rise in December.
Financials, which benefit from higher borrowing costs, led the rally. The S&P financial index jumped 2.7 per cent.
JPMorgan Chase rose 3.2 per cent to $67.89 after European antitrust regulators dropped charges against the bank on blocking exchanges from derivatives markets.
But the rally, which followed two days of sharp losses, included most sectors and allowed the three major indexes to post slight gains for the week.
“Stocks are going to have to shift to a domestic economic performance focus. We’re going to see the market focused on what the US economy is doing, rather than Fed policy,” said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.
“I think we see a continued upward trend for the rest of the year.”
Nonfarm payrolls increased 211,000 in November, the US Labor Department said, while September and October data were revised to show 35,000 more jobs than previously reported.
Analysts said the report, which also showed the unemployment rate held steady at 5 per cent, would most likely pave the way for the Fed to raise rates this month for the first time in nearly a decade.
The Dow Jones industrial average rose 369.96 points, or 2.12 per cent, to 17,847.63; the S&P 500 gained 42.07 points, or 2.05 per cent, to 2,091.69; and the Nasdaq Composite added 104.74 points, or 2.08 per cent, to 5,142.27.
LONDON – Britain’s top equity index fell, extending losses from the previous session caused by disappointment over the European Central Bank’s policy update, with miners and oil stocks reversing previous gains following a statement by OPEC.
OPEC members failed to agree an oil production ceiling on Friday at a meeting that ended in acrimony, after Iran said it would not consider any production curbs until it restores output scaled back for years under Western sanctions.
The blue-chip FTSE 100 index was down 0.6 per cent at 6,238.29 points at its close, with markets sent lower following robust US non-farm payrolls data which signalled that a rate rise in the US was on the cards for December.
“The rate rise is not the focus – the focus is how dovish (the Fed is) going to be going forward about further rate rises,” said Zeg Choudhry, managing director at LONTRAD.
He added that he had expected markets to react positively to the figure.
HONG KONG – There was no respite for investors still reeling from the disappointment of the European Central Bank’s stimulus package, as they geared up for the latest US employment data and a key OPEC meeting of oil producers.
The prospect of less ECB stimulus than markets had discounted pushed stocks deeper into the red, while the euro snapped back after soaring 3.0 per cent on Thursday in its biggest one-day rally since March 2009 and third largest in its history.
“Investors paid the price of an ECB president (Mario Draghi) who over-promised in his recent rhetoric and under-delivered,” said Michael Hewson, chief analyst at CMC Markets in London.
“This brings us to today’s US employment report for November. We would need a number below 100,000 for the market to wobble in its belief in a Fed move this month,” he said.
In Asia on Friday, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.0 per cent. Japan’s Nikkei tumbled 2.2 per cent, down 1.9 per cent for the week, the most in three months.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen on Friday fell 1.9 per cent, to 3,677.59, while the Shanghai Composite Index lost 1.7 per cent, to 3,524.99 points.
The Hang Seng index fell 0.8 per cent, to 22,235.89, while the China Enterprises Index lost 1.5 per cent, to 9,834.28 points.
WELLINGTON – The S&P/NZX 50 index dropped 30.85 points, or 0.5 per cent, to 6094.82.
