London (AFP) – Most stock markets bounced on Monday as hopes for US interest rate cuts rose following a sharp slowdown in jobs growth that raised concerns about the world’s top economy. The broad gains followed a sell-off on Wall Street Friday in reaction to the weak jobs data and news that dozens of countries would be hit with US tariffs ranging from 10 to 41 percent.
European indices mostly started the week on the front foot, with Paris gaining 0.8 percent and Frankfurt rising over one percent. “Investors seem to be taking an optimistic view…betting on an increased likelihood of further monetary easing by the Fed after Friday’s employment figures,” said John Plassard, head of investment strategy at Cite Gestion Private Bank. He noted, however, that “uncertainty reigns” as US President Donald Trump’s tariffs are set to take effect on Thursday.
Switzerland’s stock market dropped around two percent at Monday’s open, its first session as it returned from a holiday after a tough 39-percent US tariff rate was announced. The index pared some of its losses in early afternoon trading, with hopes the Swiss government can negotiate a reduction in the levy, which is steeper than that imposed on the European Union and Britain.
London advanced, lifted by banking stocks after the sector was granted reprieve from the worst of feared compensation claims over controversial car loans dating back to 2007. Lloyds Banking Group rose nearly eight percent, while Close Brothers, listed on the FTSE 250, soared more than 20 percent.
Asian investors started the week mixed, with Hong Kong and Shanghai advancing while Tokyo fell. Stocks had struggled Friday as US jobs growth missed expectation in July, with revised data showing the weakest hiring since the Covid-19 pandemic — fuelling concerns that Trump’s tariffs are starting to bite. The president responded to the data by firing the commissioner of labour statistics, accusing her of manipulating employment data for political reasons.
Markets reacted more favourably on Monday, as the slowdown boosted hopes of Fed rate cuts to support the economy. “Analysts are betting that rate-setters will prioritise recession avoidance over price controls,” said Derren Nathan, head of equity research at Hargreaves Lansdown. “This is likely the main driver of a rebound in US stock futures in anticipation of a positive market open later today,” he added.
Observers also noted that news of Federal Reserve governor Adriana Kugler stepping down six months early gives Trump a chance to increase his influence on the Fed as he pushes for lower rates. Oil prices fell after a sharp output increase by eight OPEC+ countries, with markets anticipating abundant supply.
**Key figures at around 1100 GMT:**
– London – FTSE 100: UP 0.3 percent at 9,093.20 points
– Paris – CAC 40: UP 0.8 percent at 7,606.20
– Frankfurt – DAX: UP 1.3 percent at 23,720.70
– Tokyo – Nikkei 225: DOWN 1.3 percent at 40,290.70 (close)
– Hong Kong – Hang Seng Index: UP 0.9 percent at 24,733.45 (close)
– Shanghai – Composite: UP 0.9 percent at 3,583.31 (close)
– New York – Dow: DOWN 1.2 percent at 43,588.58 (close)
– Dollar/yen: UP at 147.57 yen from 147.43 yen on Friday
– Euro/dollar: DOWN at $1.1574 from $1.1586
– Pound/dollar: UP at $1.3293 from $1.3276
– Euro/pound: DOWN at 87.10 pence from 87.25 pence
– West Texas Intermediate: DOWN 1.6 percent at $66.25 per barrel
– Brent North Sea Crude: DOWN 1.5 percent at $68.64 per barrel
© 2024 AFP
