World stocks advance ahead of US jobs report that might trigger Fed stimulus cut

BANGKOK – World stock markets advanced Friday but gains were held in check as investors awaited a U.S. jobs report that could solidify expectations about when the Federal Reserve will start reducing its expansive stimulus.

Markets in Asia were patchy while European benchmarks posted modest gains. Germany’s DAX added 0.6 per cent to 9,136.06 and France’s CAC-40 rose 0.4 per cent to 4,116.63. Britain’s FTSE 100 gained 0.4 per cent to 6,527.25. Futures augured an advance on Wall Street, with Dow and S&P 500 futures both up 0.3 per cent.

Belief that the Fed will decide to begin “tapering” its $85 billion in monthly asset purchases at its Dec. 18 meeting ratcheted up after the U.S. government reported that the U.S. economy grew at an annualized rate of 3.6 per cent in the third quarter, its fastest pace since the first quarter of 2012.

A 23,000 fall in weekly U.S. jobless claims to 298,000 also added to the evidence that the U.S. economy is growing strongly and that the stimulus, which has kept interest rates low to spur recovery, will be reduced. Whether those expectations remain intact could hinge on Friday’s official jobs report for November. Economists are forecasting that employers added 180,000 jobs last month, according to a survey by FactSet.

“U.S. data has been fairly robust this week and judging by the fact the S&P 500 has closed lower for the past five days, there is increased expectations for a solid number in today’s U.S. payrolls report,” said Chris Weston, chief market strategist at IG in Melbourne, Australia.

Earlier this year, fears of the stimulus withdrawal had caused jitters in the markets as the monetary injection has helped to shore up stocks for several years. Recently, though, the reaction has been more muted amid the realization that it’s predicated on an improving economic outlook.

Japan’s Nikkei 225 stock average rose 0.8 per cent to 15,299.86 and Hong Kong’s Hang Seng added 0.1 per cent to 23,743.10. China’s Shanghai Composite dropped 0.4 per cent to 2,237.11 and Australia’s S&P/ASX 200 fell 0.2 per cent to 5,186.

Benchmarks in Taiwan, South Korea and Southeast Asia fell.

In energy trading, benchmark U.S. crude for January delivery was down 16 cents at $97.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 18 cents to close at $97.38 on Thursday.

The euro ticked down to $1.3666 from $1.3667 late Thursday. The dollar rose to 102.17 yen from 101.82 yen.