World share markets up strongly amid US employment hopes ahead of key data

World markets up amid US employment hopes

LONDON — Global stock markets rose Thursday amid hopes that U.S. jobs creation is picking up, a further sign that the world’s largest economy is on a solid recovery path.

In Europe, Britain’s FTSE 100 index closed up 64.27 points, or 1.3 percent, to 5,215.59, while Germany’s DAX rose 86.64 points, or 1.5 percent, to 6,067.84. The CAC 40 index in France rose 59.04 points, or 1.7 percent, to 3,560.54.

On Wall Street, the Dow Jones industrial average was up 8.54 points, or 0.1 percent, at 10,258.08 while the broader Standard & Poor’s 500 index rose 2.07 points, or 0.2 percent, at 1,100.45.

The advance in the markets started on Wednesday in the wake of upbeat U.S. housing data and ahead of a raft of jobs data, which culminates in Friday’s nonfarm payrolls report for May. The payrolls data often set the tone in stock markets for a week or two after their release.

“Investors appear to be welcoming the positive vibe with open arms, hoping that the economic recovery is picking up speed,” said Will Hedden, a sales trader at IG Index.

Whether those hopes continue could well hinge on Friday’s payrolls report for May and the figures Thursday did little to alter market expectations that they will show further solid jobs creation.

The ADP payrolls reported that private sector added another 55,000 jobs in May, down from April’s upwardly revised 65,000 increase. Though May’s increase was lower than expectations of 60,000 jobs being created, the shortfall was more than made up by April’s revision from the original 32,000 original estimate.

Meanwhile, the government reported that the number of weekly jobless claims fell 10,000 to 453,000.

The consensus in the markets is that Friday’s data will show that some 515,000 jobs were added in May, compared with 290,000 added a month earlier. It would be the biggest jump in 26 years, though the overall figure is inflated by as many as 300,000 hires related to the U.S. census.

The rebound in optimism Thursday also helped the euro rally slightly for a while — the dollar has garnered much support during the last few weeks in the climate of uncertainty related to the European debt crisis.

However, expectations that the U.S. jobs data Friday could well prompt the U.S. Federal Reserve to start raising borrowing costs sooner than anticipated has helped support the dollar — higher rates would make the dollar more attractive, especially as the European Central Bank is likely to keep borrowing costs low for longer.

“The data from the U.S. has continued to provide positive surprises, with all the signs that the labour market report on Friday will deliver bullish dollar news,” said Hans Redeker, global head of foreign exchange strategy at BNP Paribas.

By mid-afternoon London time, the euro was down 0.4 percent at $1.2196.

Earlier in Asia, Japan’s benchmark Nikkei 225 stock index climbed 3.2 percent to 9,904.92, South Korea’s Kospi gained 1.7 percent to 1,658.31 and Hong Kong’s Hang Seng was 1.8 percent higher at 19,830.59. Shares in Australia, Taiwan and Singapore also advanced. The exception in Asia was the benchmark Shanghai Composite Index, which fell 18.77 points, or 0.7 percent, to close at 2,552.66.

The firmer tone in the stock markets was evident in oil prices, too — benchmark crude for July delivery was up 22 cents at $73.08 a barrel in electronic trading on the New York Mercantile Exchange.

Associated Press Writer Pamela Sampson in Bangkok contributed to this report.