Stock markets cheer booming US jobs market

LONDON: Stock markets on both sides of the Atlantic rose on Friday, hailing US jobs data that confounded expectations, showing the lowest unemployment rate in half a century.

Shortly before the opening bell on Wall Street, the US government reported another giant month of job creation in April, with strong hiring in the vast services sector and unemployment falling to a level not seen since December 1969, when Richard Nixon was in the White House.

"No signs of a slowdown here," said James Knightley, Chief International Economist at ING.

Crucially, investors will no longer need to rely on hopes for Federal Reserve rate cuts to underpin their optimism, he said.

"The market is pricing Fed rate cuts, but we really don't see the need," Knightley said.

- 'Goldilocks' -

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"Neither too hot nor too cold," said Stephen Innes, Head of Trading at SPI, calling the US data "another Goldilocks" payroll report.

"The US economy remains in the sweet spot with extremely robust labour markets driving strong consumption growth but apparently without stoking the inflationary fires," he said.

US stocks advanced at the opening in reaction, while European equities extended their earlier gains.

The London market outperformed its eurozone peers, shrugging off news that Britain's two main parties faltered badly in UK local elections, as voters vented their frustration with the prolonged Brexit deadlock.

"London stocks were largely unperturbed by the results as clearly bigger decisions await between now and (the) October" Brexit deadline, noted Fiona Cincotta, senior market analyst at City Index trading group.

The US jobs figures came after the head of the Federal Reserve disappointed markets on Wednesday by saying that recent weak inflation was "transitory", denting hopes the US central bank would consider an interest rate cut this year.

The dollar rose as this scenario seemed to be borne out by the jobs data.

- US-China trade concerns -

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On the trade front, there was some unease after a report in Chinese media speculated that negotiators from China and the US had hit an impasse in the trade negotiations, citing the fact there were few details from their most recent talks in Beijing this week.

"Whilst these are just initial reports, clearly anything that suggests the US and China won't agree a deal will rattle investors," said Neil Wilson, chief market analyst for Markets.com.

However, the National Australia Bank pointed out that the comments contradicted reports by Politico and CNBC that suggested a deal could come as soon as next Friday.

In commodities trading on Friday, oil prices steadied after main contracts Brent and WTI tumbled from touching six-month highs last week. They took another hit on Thursday as data showed a surge in US stockpiles and output.

Oil had been rallying in recent weeks on output cuts by producer nations, Iran supply concerns, unrest in fellow OPEC members Libya and Venezuela and hopes for the China-US trade talks -- before heavy profit-taking took hold.

- Key figures around 1340 GMT -

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London - FTSE 100: UP 0.8 percent at 7,417.26 points

Frankfurt - DAX 30: UP 0.5 percent at 12,401.81

Paris - CAC 40: UP 0.4 percent at 5,558.77

EURO STOXX 50: UP 0.5 percent at 3,505.67

New York - Dow: UP 0.6 percent at 26,468.08

Hong Kong - Hang Seng: UP 0.5 percent at 30,081.55 (close)

Shanghai - Composite: Closed for holiday

Tokyo - Nikkei 225: Closed for holiday

Euro/dollar: DOWN at $1.1161 from $1.1173 at 2050 GMT

Pound/dollar: DOWN at $1.3033 from $1.3034

Dollar/yen: DOWN at 111.39 yen from 111.50 yen

Oil - Brent Crude: DOWN 6 cents at $70.69 per barrel

Oil - West Texas Intermediate: UP one cent at $61.82 per barrel