Stock markets rebound before US jobs data

LONDON: Stock markets largely rebounded Friday, helped by better news surrounding China, and as attention turned to upcoming US jobs data for clues on growth.

"Equity markets have rallied... after some positive news was released from China overnight," noted David Madden, market analyst at CMC Markets UK.

A leading survey of Chinese manufacturing nudged higher for December, confounding analysts who had expected it to decline.

"The announcement was a welcome change from the negative news surrounding China this week," Madden added.

Investors have been concerned about China's economy slowing down due to the trade disputes with the United States.

Meanwhile, China's central bank moved to stimulate the economy by allowing commercial banks to use more of their funds for lending.

Market analyst David Cheetham at XTB online trading platform said that move by China's central bank "cut the bank reserve ratio by 1 percentage point to release around 1.5 trillion yuan of liquidity and this has sparked a rally this morning in stocks as they look to recover from recent declines."

Hopes of progress regarding China-US trade war tensions also provided support to equities, analysts said.

Beijing said Friday a US delegation would visit China at the start of next week for the first face-to-face talks since President Donald Trump and his Chinese counterpart Xi Jinping agreed a ceasefire.

Word of the meeting follows small signs of progress -- and the absence of new threats from Trump -- while the two sides work to ease trade tensions.

Nevertheless, traders remain on edge as they face a confluence of issues including a Chinese stuttering economy overall, the US government shutdown and Brexit.

Gold, which along with the yen has in recent sessions profited from haven investment status, reached a six-month high at $1,298.31 an ounce.

Tokyo's main stocks index meanwhile slumped as it caught up with losses elsewhere in recent days caused in part by Apple's shock revenue warning.

Traders were looking ahead to the US employment figures for December due Friday, which are set to give another snapshot of the economy.

A strong reading will likely put pressure on the Federal Reserve to press on with its interest rate hikes, according to analysts.

The prospect of borrowing costs becoming more expensive was another factor helping drive down equities late last year.

"The US jobs report is widely regarded as the most important economic release each month and offers insight into the world's largest economy at a time when slowdown fears are heightened," noted Craig Erlam, senior market analyst at Oanda trading group.

Stock markets had retreated Thursday as China's slowing economy forced Apple to slash its revenue forecast, wiping around $75 billion from the company's value and denting global investor sentiment.

Analysts said the fact such a usually safe firm was feeling the pinch was a sign of deeper problems in the global economy.

Share prices in technology firms, particularly those linked to Apple, continued to fall on Friday.

- Key figures around 1200 GMT -

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London - FTSE 100: UP 1.4 percent at 6,784.33 points

Frankfurt - DAX 30: UP 1.8 percent at 10,602.12

Paris - CAC 40: UP 1.3 percent at 4,670.44

EURO STOXX 50: UP 1.5 percent at 2,998.69

Tokyo - Nikkei 225: DOWN 2.3 percent at 19,561.96 (close)

Hong Kong - Hang Seng: UP 2.2 percent at 25,626.03 (close)

Shanghai - Composite: UP 2.1 percent at 2,514.87 (close)

New York - Dow: DOWN 2.8 percent at 22,686.22 (close)

Dollar/yen: UP at 108.00 yen from 107.63 yen at 2200 GMT

Euro/dollar: UP at $1.1410 from $1.1394

Pound/dollar: UP at $1.2672 from $1.2637

Oil - Brent Crude: UP $1.29 at $57.24 per barrel

Oil - West Texas Intermediate: UP $1.04 at $48.13