Friday, 19 Aug, 2022

Global stocks rally after weak US jobs report cools concerns about a faster shift in Fed policy

Stocks have risen sharply in Japan in the last two sessions.KAZUHIRO NOGI/GettyGlobal stocks rose on Monday despite the US jobs recovery slowing..

title Stocks have risen sharply in Japan in the last two sessions.
  • Global stocks rose on Monday despite the US jobs recovery slowing sharply in August.
  • Investors think the weak jobs report will cause the Fed to keep up its support for the economy and stocks.
  • Elsewhere, Brent crude oil fell on Monday after Saudi Arabia cut prices to woo Asian buyers.
  • See more stories on Insider's business page.

Global stocks climbed on Monday after a disappointing US jobs report eased investor concerns that the Federal Reserve might soon cut back its support for the world's biggest economy.

Asian stocks rallied overnight, with Japanese equities surging, after Prime Minister Yoshihide Suga's announcement that he will resign sparked hopes that his successor will be liberal with economic stimulus and better handle the coronavirus crisis.

Tokyo's Topix index rose 1.28% to a 31-year high, while the city's Nikkei 225 rose 1.83%. China's CSI 300 stock index rose 1.87% and the Hong Kong Hang Seng climbed 0.9%.

In Europe, the continent-wide Stoxx 600 index rose 0.57% in early trading. The UK's FTSE 100 rose 0.56%.

US stock and bond markets were closed on Monday for the Labor Day holiday. S&P 500 futures were up 0.19% in European trading, however, after the index closed flat on Friday. Nasdaq 100 futures were 0.28% higher and Dow Jones futures rose 0.2%.

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The rise in stocks follows evidence of a slowdown in US job creation in August, as the weak figures are expected to push the Fed to keep up its support for the economy for a while longer.

US nonfarm payrolls - the most closely watched labor market measure - rose by just 235,000 in August from an upwardly revised 1.05 million increase in July. It was the smallest increase in seven months.

"A major miss from the US unemployment reading has had the ironic impact of reducing investor jitters," Richard Hunter, head of markets at trading platform Interactive Investor, said.

"The Delta [coronavrius] variant, as largely expected, has continued to impact new job openings, particularly in the areas of hospitality and retail."

Elsewhere in markets, Brent crude oil fell 0.61% to $72.20 a barrel after Saudi Arabia cut oil prices for sales to Asia in an effort to lure in more buyers, Bloomberg reported.

Bitcoin climbed over the weekend to stand at $51,699 on Monday. The biggest cryptocurrency has risen sharply in recent weeks after tumbling to below $30,000 in July, during a broader rally in digital assets.

It is set to be a busy week for markets after traders and investors return from the US Labor Day holiday.

President Joe Biden is expected to make a decision on whether to nominate Fed Chair Jerome Powell for a second term. The European Central Bank will set interest rates on Thursday. And El Salvador's law that will make bitcoin legal tender is set to come into force on Tuesday.

Read the original article on Business Insider