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World markets rally despite weak US jobs report
June 03, 2017
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London: Asian and European stock markets rose Friday and Wall Street pushed further into record territory despite US job creation data missing expectations.

London’s FTSE 100 hit yet another record high at 7,598.99 points in morning deals, before trimming gains ahead of next week’s British election.

The Dow Jones Industrial Index rose 0.1 percent from its record close at the opening bell, shrugging off disappointing employment news from the Labor Department.

The US economy added just 138,000 net new jobs for May, well below analyst expectations, though the jobless rate decreased by a tenth of a point to 4.3 percent, a 16-year low.

“US stocks are modestly higher following yesterday’s data-fueled advance, which appears to be lifting European equities and helped Asian markets gain ground,” said analysts at Charles Schwab brokerage.

“The advance comes even as the May US nonfarm payroll report showed job gains noticeably missed estimates and included downward revisions to prior months...” the added.

Oil tumbled on concerns of a ramp-up in fossil-fuel production following President Donald Trump’s controversial decision to withdraw the United States from the Paris climate agreement.

While there are concerns about the future of Trump’s economic agenda, strong data have taken the front seat in driving global equity gains in recent weeks, pushing them to multi-year highs.

A healthy reading in the non-farm payrolls report would have given the Federal Reserve backing to hike interest rates again later this month.

But the mixed picture presented by Friday’s figures muddies the waters.

Asian and European equities meanwhile headed into the weekend with another round of gains following a record close Thursday for all three major New York indices on different job creation data that provided a more encouraging picture about the economy.

Trump’s climate agreement withdrawal drew criticism from US behemoths Amazon, Apple, Google and Facebook, but aside from oil prices, there appeared to be little in the way of major market impact.

“As global leaders decried Donald Trump’s decision to withdraw the US from the Paris climate accord, investors were quietly pumping funds into the stock market,” said CMC Markets analyst Jasper Lawler.

“Dumping the climate deal has not really hurt of hindered investor appetite for risk.

“If anything, The Donald taking a difficult decision to fulfil a campaign pledge is welcome if the same can be done with respect to tax policy.” With less than a week to go before Britain’s general election, the pound continued its recent fall that began with a polls surge for the opposition Labour Party.

Prime Minister Theresa May’s ruling conservative party is nevertheless widely expected to win.

Agencies

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