Stock market today: Global markets up ahead of US jobs data

BEIJING: Global stock markets were mostly higher on Friday ahead of a US jobs update amid worries about the health of banks under pressure from interest rate hikes.

London, Frankfurt, Hong Kong and Wall Street futures advanced. Shanghai declined. Markets in Japan and South Korea were closed for holidays. Oil prices advanced.

The US government was due to report April employment data that are expected to show a slowdown in job growth. Investors hope more signs the economy is weakening might prompt the Federal Reserve to call off possible additional rate hikes to cool inflation.

“We estimate a slowdown in net job growth and tick up in the unemployment rate,” said Rubeela Farooqi of High Frequency Economics in a report.

In early trading, the FTSE 100 in London rose 0.4per cent to 7,733.23. The DAX in Frankfurt gained 0.3per cent to 15,785.07 and the CAC 40 in Paris added 0.4per cent to 7,368.51.

On Wall Street, the future for the benchmark S and P 500 index was up 0.3per cent. That for the Dow Jones Industrial Average rose 0.1 per cent.

On Thursday, the S and P 500 index lost 0.7 per cent as investors worried about the health of banks following three high-profile failures in the United States and one in Switzerland. The Dow dropped 0.9 per cent and the Nasdaq fell 0.5 per cent.

Shares of PacWest Bancorp, a target of investor scrutiny, tumbled 50.6 per cent. The bank said it was considering options and has been approached by potential partners and investors.

Investors want to know steps authorities might take to “limit further contagion risks,” Yeap Jun Rong of IG said in a report. “Any inaction over the weekend could translate to a more downbeat risk environment to start next week.” In Asia, the Shanghai Composite Index lost 0.5 per cent to 3,334.50 while the Hang Seng in Hong Kong gained 0.5 per cent to 20,049.31. Sydney's S and P-ASX 200 rose 0.4 per cent to 7,220.00.

India's Sensex sank 0.8per cent to 61,261.70. New Zealand and Southeast Asian markets declined.

Rate hikes by the Fed and other central banks in Europe and Asia have put pressure on banks by causing the market prices of bonds on their books to decline.

Investors worry depositors might pull money out of lenders that are thought to be troubled, worsening their financial pressures.

On Wednesday, the Fed raised its key overnight rate to a range of 5 per cent to 5.25 per cent from close to zero early last year.

Shares of Western Alliance Bancorp plunged as much as 61 per cent on Thursday after The Financial Times said the Phoenix-based bank was considering selling its business. The company denied the report. Its stock ended the day down 38.5 per cent.

This week, regulators seized First Republic Bank and sold most of it to JPMorgan Chase.

Officials say the banking system is sound and secure, but investors worry.

Traders expect at least a brief US recession this year.

They expect the Fed to start cutting rates in the second half of the year to prop up economic growth, though chair Jerome Powell said this week he doesn't see cuts coming so early.

A report Thursday showed the number of US workers filing for unemployment last week accelerated a bit more than expected.

The Fed indicated Wednesday it might be finished with rate hikes for now, but the president of the European Central Bank, Christine Lagarde, on Thursday said, “we are not pausing.” The ECB announced another rate hike but by a smaller margin of one-quarter percentage point.

Helping to support stocks despite all the worries has been a largely better-than-feared earnings reporting season.

Companies in the S&P 500 are still on track to report a second straight quarter of profit drops, but the results have mostly been better than expected.

In energy markets, benchmark US crude rose 71 cents to USD 69.27 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 4 cents on Thursday to USD 68.56.

Brent crude, the price basis for international oil trading, added 79 cents to USD 73.29 per barrel in London. It advanced 17 cents the previous session to USD 72.50.

The dollar declined to 134.02 yen from Thursday's 134.14 yen. The euro gained to USD 1.1026 from USD 1.1016.