Global shares mixed as US jobs data ease inflation worries

Tokyo: Global shares were mixed on Monday after a disappointing US jobs report signalled to investors that interest rates will likely stay low France’s CAC 40 dipped nearly 0.2 per cent to 6,374.45 in early trading, while Germany’s DAX fell 0.2 per cent to 15,375.92. 

Britain’s FTSE 100 edged 0.1 per cent higher to 7,137.48. The future for the Dow industrials rose 0.2 per cent to 34,755.00 while the S&P 500 future was unchanged at 4,224.60. 

The US economy is regaining momentum as the rate of coronavirus vaccinations rises, but Friday’s US jobs report was a massive disappointment. 

The market’s most anticipated economic data of each month, it showed employers added just 266,000 jobs in April, far fewer than the 975,000 jobs that economists were expecting. It was a steep drop from March’s hiring pace of 770,000.

The weak jobs number suggests the economy is still in recovery mode and bolsters the case for the Federal Reserve to keep interest rates low. 

The Fed has been holding short-term rates at a record low and buying USD 120 billion in bonds every month, helping drive the stock market’s rebound from its pandemic low in March 2020. 

Investors have been fretting that a supercharged economy could spur higher, persistent inflation, forcing the US central bank to raise rates. 

Obviously this release blew market bets about Fed tapering and inflation out of the water,” Michael Every of RaboResearch said in a commentary. 

 Indeed, there is now a stronger view that central banks can carry on pumping asset markets and commodity prices — and so headline CPI — in the hope this will magically generate wage inflation.” 

In Asian trading, Japan’s Nikkei 225 rose 0.6 per cen to finish at 29,518.34. Australia’s S&P/ASX 200 jumped 1.3 per cent to 7,172.80. South Korea’s Kospi added 1.6 per cent to 3,249.30. 

Hong Kong’s Hang Seng slipped less than 0.1 per cent to 28,595.66, while the Shanghai Composite added 0.3 per cent to 3,427.99. 

In Japan, worries are growing about tens of thousands of athletes and officials entering the country for the Tokyo Olympics, set to open in July. Many will be from countries where people have been vaccinated, while the rollout has been extremely slow in Japan, with about 3 per cent of the population inoculated so far. 

The Tokyo Olympics organizers are promising stringent measures to prevent clusters and testing the athletes and officials regularly for infections. 

Recent relatively strong global earnings reports have lifted share prices. Among companies reporting earnings later this week are Japanese automakers Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. 

On Friday, the S&P 500 index rose 0.7 per cent to 4,232.60, its third straight gain, and topping the previous all-time high set last month. 

The Dow Jones Industrial Average gained 0.7 per cent to 34,777.76, setting a record high for a third straight day. The Nasdaq composite picked up 0.9 per cent, to 13,752.24.

Small company stocks also got a solid bump. The Russell 2000 index outgained the major stock indexes, climbing 1.4 per cent to 2,271.63.

In energy trading, benchmark US crude added 43 cents to USD 65.33 a barrel in electronic trading on the New York Mercantile Exchange. It gained 19 cents to USD 64.90 per barrel on Friday. Brent crude, the international standard, gained 47 cents to USD 68.75 a barrel. 

In currency trading, the US dollar rose to 108.82 Japanese yen from 108.59 yen late Friday. The euro inched up to USD 1.2168 from USD 1.2167.