A roundup of trading on major world markets:
NEW YORK – Wall Street have stocks surged after the Labor Department reported the US economy added a solid 223,000 jobs in April and unemployment fell to a seven-year low of 5.4 per cent.
At the closing bell on Friday, the Dow Jones Industrial Average had powered 267.05 points (1.49 per cent) higher to 18,191.11.
The broad-based S&P 500 jumped 28.10 (1.35 per cent) to 2,116.10, while the tech-rich Nasdaq Composite Index gained 58.00 (1.17 per cent) at 5,003.55.
The April labour data marked a big improvement from March, when the US added just 85,000 jobs. At the same time the US labour market showed some signs of weakness, with wages barely growing and underemployment still elevated.
The jobs data “came in at a sweet spot” for Wall Street, said David Levy, portfolio manager at Kenjol Capital Management.
The report was much better than in March, but “was not so strong as to suggest the Federal Reserve may actually raise rates next month,” he said.
Many economists said the jobs data suggested the Fed likely would wait until September or later in its plan to lift the near-zero federal funds rate this year.
The equity gains were broad-based, with all 30 members of the Dow finishing in the green. Apple rose 1.8 per cent, Boeing advanced 2.8 per cent and Goldman Sachs added 1.6 per cent.
LONDON – London’s stock market have rallied and the pound surged as Prime Minister David Cameron’s “business-friendly” Conservatives scored a surprise victory in Britain’s general election.
Most other European indices also shot up on Friday as US job creation figures, while solid, were viewed by the market as not being strong enough for the US Federal Reserve to begin raising interest rates next year.
The benchmark FTSE 100 index jumped 2.32 per cent to close at 7,046.82 points, lifted by soaring share price gains for banks and energy majors.
Among the biggest winners were energy firm Centrica, up 8.08 per cent to 278.20 pence and state-rescued Lloyds Banking Group, up 5.75 per cent to 86.85 pence, with the Conservatives seen as being less tough on regulating the financial and energy sectors compared with the Labour party, which will remain as the main opposition party.
“The Conservatives are seen as being more business friendly and more importantly, offer continuity in a country that last year experienced the fastest rate of growth in the G7,” said Craig Erlam, senior market analyst at Oanda trading group.
As the results rolled in, forecasts of a close contest between the Conservatives and Labour turned out to be wide of the mark, with Cameron winning a majority in parliament and securing five more years in Downing Street.
The outcome sent the British pound soaring to $US1.5462 from $US1.5262 late in New York on Thursday. The euro was down at 72.73 pence from 73.82 pence.
European indices shot up after the Labor Department reported the US economy created a solid 223,000 net new jobs in April.
“The figures weren’t exceptional and the market thus estimated there is no chance the Fed will raise rates in June, and more likely do so at the end of the year,” said Saxo Banque analyst Andrea Tueni.
The CAC 40 in Paris gained 2.48 per cent to close at 5,090.39 points, while the DAX 30 in Frankfurt soared 2.65 per cent to 11,709.73 points.
Madrid climbed 2.19 per cent and Milan rose 2.06 per cent.
The US Federal Reserve had been expected to start increasing the benchmark federal funds rate from the zero level in June, but the US economy unexpectedly slowed in the first quarter of the year.
HONG KONG – Asian stock markets were broadly higher, but some leading indexes surrendered gains as investors eyed a US jobs report that will supply more clues about the strength of the world’s top economy.
Tokyo’s benchmark Nikkei index on Friday rose 87.20 points, or 0.45 per cent, to end at 19,379.19, and Hong Kong added 1.05 per cent, or 287.37 points, to close at 27,577.34.
“But if the data is worse than expected, we could see global stocks suffer a deeper correction as the market shifts toward a deflationary story.”
Chinese shares benefited from hopes for policies to boost the economy after China posted weaker-than-expected trade data, dealers said.
Shanghai was the star gainer after a week of heavy losses, finishing up 2.28 per cent, or 93.71 points, to 4,205.92. Despite the gains, the index lost 5.31 per cent over the week.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, surged 4.17 per cent, or 90.87 points, to 2,272.17 on turnover of 512.9 billion yuan. It gained 0.19 per cent for the week.
WELLINGTON – The New Zealand sharemarket has closed slightly higher, as investors’ appetite for income-paying equities returned.
The NZX 50 Index rose 6.002 points, or 0.1 per cent, to 5735.355 on Friday.
