Europe stocks lower, Asia mixed after ECB inaction, ahead of US jobs report
World stocks were dulled Friday by caution ahead of the monthly U.S. jobs report after the European Central Bank delayed any additional stimulus to early next year. Stocks in Hong Kong and mainland China were the only bright spot, extending gains from the previous sessions.
KEEPING SCORE: Britain's FTSE 100 fell 0.6 percent to 6,679.37 and France's CAC 40 sank 1.6 percent to 4,323.89. Germany's DAX dropped 1.2 percent to 9,851.35. U.S. stocks were set for a lackluster start. Dow futures were up 0.1 percent at 17,900 while S&P 500 futures were little changed at 2,072.40.
US JOBS: The government issues the November jobs report later Friday. Last month's report showed that the unemployment rate fell to 5.8 percent, and employers added at least 200,000 jobs for the ninth straight month, the longest such stretch since 1995. Analysts projected that the economy generated 225,000 jobs in November and that the unemployment rate remained 5.8 percent. The report will also detail average hourly earnings, which are expected to rise 0.2 percent.
ECB MEETING: After deciding to keep its benchmark interest rate unchanged at 0.05 percent, as expected, the European Central Bank did not unveil new stimulus on Thursday. Rather, President Mario Draghi said the ECB will reassess in the first months of 2015 the success of its existing stimulus programs and the impact of the recent plunge in oil prices on the economy of the 18-country euro bloc. The ECB forecasts for growth this year and next year have been revised down again. The outcome of the meeting disappointed investors who were expecting that the stimulus to support the struggling region would be imminent.
ASIA'S DAY: Tokyo's Nikkei 225 added 0.2 percent to 17,920.45 and South Korea's Kospi closed flat at 1,986.62. Stocks in Hong Kong and mainland China finished higher. Hong Kong's Hang Seng rose 0.7 percent to 24,002.64 while's China Shanghai Composite rose 1.3 percent to 2,937.65. Australia's S&P/ASX 200 dropped 0.6 percent to 5,335.30.
CHINA RALLY: Analysts say the recent rally in Shanghai shares was triggered by last month's interest rate cuts though that does not fully explain the current level of exuberance; the Shanghai Composite is up about 17 percent since the Nov. 21 rate cuts. "The initial takeoff during the summer coincided with a number of articles being published in official media highlighting the low level at that time of equity valuations," said Capital Economics of China's share market rally. "This seems to have convinced many that the government was determined to see the market rise."
ENERGY: Benchmark U.S. crude was down 35 cents at $66.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 57 cents to settle at $66.81 on Thursday. Brent crude declined 39 cents to $69.25 a barrel on the ICE exchange in London
CURRENCIES: The dollar gained to 120.30 yen from 119.76 yen. The euro fell to $1.2370 from $1.2386.