LONDON – World stocks and oil prices eased on Monday as some investors booked profits after last week's strong rally, but signs of a brightening global economic growth outlook limited the falls.
Data from the United States on Friday showed employers kept up a steady pace of hiring in December and its vast services sector was expanding at a brisk rate, while manufacturing surveys last week pointed to a pick up in China.
This compounded the boost to markets from the last-minute deal to avert a U.S. fiscal crisis reached at the start of the year, at least for the moment.
"Overall, the market's positive trend is still intact," said Lionel Jardin, head of institutional sales at Assya Capital in Paris. "The (stock) market is ripe for a pause, but with so much cash on the sidelines, there are a lot of buyers showing up each time we have a dip."
After touching a 22-month peak last week, the FTSE Eurofirst <.FTEU3> index of top European shares was down 0.2 percent at 1,164 points. The UK's FTSE 100 index was down 0.25 percent, Germany's DAX index fell 0.4 percent, and France's CAC 40 eased 0.5 percent.
Asia-Pacific shares outside Japan <.MIAPJ0000PUS>, which reached their highest levels since August 2011 on Thursday, eased 0.1 percent, while Tokyo's Nikkei share average <.N225> ended down 0.8 percent, just below a 23-month high.
MSCI's broad world equity index <.MIWD00000PUS> had dipped 0.1 percent but wasn't far from an 18-month peak scaled when investors returned to the market after an immediate U.S. fiscal crisis was averted.
Financial shares outperformed the broader market after global regulators agreed to give banks four more years and greater flexibility to build up cash buffers so they can use some of their reserves to help economies grow.
The STOXX 600 European banking index <.SX7P> was up by 1.5 percent to 172.58 points.
"The move gives the banking sector some breathing space, which would be good for the economy as a whole," said Koen De Leus, senior economist at KBC Group.
U.S. stock index futures point to a weaker open on Wall Street later as buyers take a breather after they pushed the benchmark Standard & Poor's 500 index to a five-year high on Friday in the wake of the jobs report.
Brent crude oil futures slipped 40 cents to $110.89 per barrel after rising 0.6 percent last week.
Investors were beginning to look to the first policy meetings of the year at the European Central Bank and Bank of England on Thursday, when no rate moves are expected but new euro zone forecasts are due.
Some analysts expect the ECB to point to the prospect of easier rates early this year, a week after the U.S. Federal Reserve indicated it may pursue less accommodative policies in future. The Bank of Japan is also expected to take major steps to stimulate the country's economy later this month as the new government aims to end deflation and recession.
The possibility of less monetary stimulus in 2013 from the Fed and more from the BOJ sent the dollar to a two-and-a-half year peak against the yen last week. However, profit taking saw it pull back on Monday by 0.5 percent to 87.75 yen.
The euro eased 0.2 percent to $1.3040 but was trading above a three-week low of $1.2998 hit on Friday. Analysts said it could stay around these levels until the ECB meeting.
In the European bond markets, investors scooped up German government bonds after their steep falls last week as expectations changed over the Fed's next move.
Ten-year German cash yields were 2.2 basis points lower on the day at 1.523 percent. Other euro zone bond yields were steady to slightly higher as traders awaited debt auctions by Spain and Italy later in the week.
U.S. Treasury 10-year notes were mostly steady at 1.90 percent after reaching 1.975 percent on Friday in a sell-off fuelled by the expectations of less easy monetary policy this year.
Further moves are likely to be limited due to sales of three-year notes on Tuesday, 10-year notes on Wednesday and 30-year bonds on Thursday.
Gold was off its lows of last week but in line with equities and oil had eased slightly. Spot gold was down 0.15 percent $1,653.50 an ounce though above Friday's $1,625.79, its lowest price since August.
(Additional reporting by Blaise Robinson and Atul Prakash,; editing by David Stamp)