Payrolls numbers knock stocks, dollar

By Patrick Graham

LONDON (Reuters) - Stock markets slid sharply on Friday and the dollar fell after U.S. non-farm payrolls numbers came in well short of forecast, adding to concerns over the pace of economic growth that have weakened investors' appetite for risk globally.

Futures prices showed Wall Street set to open as much as half a percent lower while stock markets in Europe deepened morning falls, sending global indices towards their worst weekly losses since early February.

Earlier Asian markets had fallen by as much as 2-3 percent, helping prod the MSCI world index some 2 percent lower on the week, a reflection of the gloom which has begun to grip global investors again.

The dollar, battered by the collapse since February in expectations for rises in U.S. interest rates this year, handed back all of the day's gains against the euro and a basket of currencies to stand roughly 0.3 percent lower.

The report showed the U.S. economy added the fewest number of jobs in seven months in April, only 160,000 compared to expectations of around 200,000.

"The labour market has been a shining beacon compared with other elements of the U.S. economy for the past few months, but no longer," said Dennis de Jong, managing director of London based broker UFX.com.

"Today's figure has come in disappointingly low."

(Editing by Nigel Stephenson)