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Stocks hit two-week high as U.S. jobs report spreads relief

Reuters  |  LONDON 

By Kit Rees

LONDON (Reuters) - Global shares hit a two-week high on Monday as favourable U.S. jobs data whetted risk appetites, while sterling brushed off the resignation of two ministers over Britain's departure from the EU, with traders focused on the likelihood of a "soft Brexit".

The equity index, which tracks shares in 47 countries, rose 0.4 percent, while the pan-European index was up 0.5 percent, led by a strong bounce across and

The pound regained ground after an earlier wobble after broke that Secretary and had resigned in opposition to British Theresa May's plan for leaving the EU.

Sterling hit its highest level since June 14, up 0.4 percent at $1.3337. Britain's FTSE gained 0.4 percent.

The resignations came just two days after a meeting at May's Chequers country residence supposedly sealed a cabinet deal on and underlines the deep divisions in her ruling over the departure from the EU.

"Sterling up and FTSE up does suggest that there's a slight sigh of relief generally," Ian Williams, economics & at Peel Hunt, said.

"(The UK) is quite defensive, so in trade war times when industrials and tech are getting clobbered, that's not so much of problem for the UK because those sectors are not as big in weighting terms as they are for the Euro zone or the U.S.," added Williams.

More broadly, sentiment across markets was mostly positive after Friday's U.S. payrolls report showed tame wages and more people looking for work.

"The combination of rising employment and increased labour force participation suggests healthy but not tightening labour market conditions in June, something that will allow the Fed to continue to hike rates at a gradual pace," said Kevin Cummins, a senior U.S. at

The balanced report helped Japan's Nikkei end 1.2 percent higher, while E-Mini futures for the firmed 0.4 percent, set to extend Friday's rally when the jobs report was released.

MSCI's broadest index of shares outside climbed 1.3 percent, on top of a 0.7 percent rally on Friday when the launch of U.S. tariffs on Chinese imports came and went without too many fireworks.

In currency markets, the U.S. dollar was mostly softer following the jobs report.

Against a basket of currencies the dollar had pulled back to 93.797, from a top of 94.486 on Friday. The euro held its gains at $1.1776, while the dollar was flat on the yen at 110.42.

"SOARING" U.S. ECONOMY

Global stocks were under pressure in June as uncertainty over trade dented risk appetite.

"Our central expectation is that these skirmishes do not escalate into a full trade war," Karen Ward, for EMEA at J.P. Morgan Asset Management, said.

However, attention has shifted to the strong economic backdrop and the upcoming second-quarter earnings season.

"While trade tensions fan concerns about the future, incoming data show a soaring U.S. economy, a healthy labour market, and some rebound in and Japan," said

"For now, overall policies and financial conditions still support growth and investment," he added.

Chinese shares managed to rally on Monday with the blue chip index up 2.8 percent after hitting its lowest in almost 18 months last week.

China's securities regulator said on Sunday it plans to ease restrictions on foreign investment in stock listed on the or exchanges to attract more foreign capital and support the

The focus this week would be on Chinese data for June covering inflation, new loans and international trade. The also releases figures, while the might well hike rates on Wednesday.

In commodity markets, pushed higher as the dollar eased. Brent rose 81 cents to $77.92 a barrel.

Gold was 0.9 percent firmer at $1,265.06 an ounce.

(Reporting by Kit Rees, Additional reporting by in Sydney; Editing by Peter Graff)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, July 09 2018. 17:08 IST
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