Europe stocks steady as eyes on US jobs data

European stocks were mostly higher Friday as economic fundamentals returned to the fore, with all eyes on a US jobs report expected to give clues on American interest rate policy.

Brexit-related uncertainties continued to weigh on London shares, but the pound regained some ground against the dollar and a calmer mood even allowed traders to relax into football chat after France beat Germany in the Euro-2016 semi-finals.

"We expect there is more debate this morning about France's victory over Germany than about Brexit or anything else occupying the market recently," said analysts at the Aurel BGC brokerage in Paris.

"Today's session will truly begin at 1430 (1230 GMT) with the American jobs data," they said.

At around 0925 GMT, Frankfurt and Paris were around half a percent higher, while London eased back slightly.

"Overall, we appear to be in a holding pattern at the end of what has been a fairly turbulent week," said Michael Hewson, chief analyst at CMC Markets.

Financial stocks gained, "driven by reports that authorities are working intensely with the various Italian banks to find solutions to the problems of bad loans", he said.
In Milan, Banco Popolare shares rose 10 percent in morning business after the bank reported that internal stress tests had confirmed its capacity to resist external shocks. 

Asian markets fell at the end of a volatile week dominated by the fallout from Britain's EU exit vote and ahead of the employment figures from Washington.

- No alarm bells -

The June non-farm payrolls figures will be pored over for clues about the Federal Reserve's interest rate plans in light of the Brexit vote, following a surprisingly low reading in May.

They come after a week of losses in stocks around the world, after the head of the Bank of England said the risks of leaving the EU were "crystalising" and British property investment funds suspended client withdrawals to prevent a run.

"While a strong June report is not going to ring alarm bells for an imminent rate hike, strong print tells the market that when the post-Brexit dust settles, the door will be open for the Fed to resume a path of interest rate normalisation," said Stephen Innes, senior trader at OANDA Asia Pacific.

Weak German data added to expectations the the European Central Bank will also be offering further monetary support.

This view was reinforced Friday as the European powerhouse's trade surplus shrank because of falling exports, pointing to weakness in the economy.

Tokyo fell 1.1 percent -- a fourth-straight loss ahead of weekend elections to Japan's upper house that are expected to see a win for Prime Minister Shinzo Abe's party despite the country's stuttering economy.

Shanghai ended one percent lower and Seoul shed 0.6 percent. Hong Kong finished down 0.7 percent.

Singapore dipped 0.9 percent but Sydney closed slightly higher.

- Sterling catches breath -

On currency markets the lingering fear of riskier assets weighed down the dollar against the safe-haven yen, while the greenback climbed against emerging market and higher-yielding units.

The dollar's strength is also being sapped by the current view that the Federal Reserve will not rush into rate hikes.

This allowed the British pound to edge up to $1.2931, still below the $1.30 mark but stronger than the 31-year low of $1.2798 touched Wednesday.

Oil prices bounced back slightly after a mauling on Thursday fuelled by a smaller-than-expected fall in US inventories.

- Key figures around 0920 GMT -

London - FTSE 100: DOWN 0.3 percent at 6,516.28

Frankfurt - DAX 30: UP 0.6 percent at 9,474.23

Paris - CAC 40: UP 0.3 percent at 4,130.23

EuroStoxx: UP 0.5 percent at 2,793.83

Tokyo - Nikkei 225: DOWN 1.1 percent at 15,106.98 (close) 

Hong Kong - Hang Seng: DOWN 0.7 percent at 20,564.17 (close)

Shanghai - Composite: DOWN 1.0 percent at 2,988.09 (close)

Pound/dollar: UP at $1.2931 from $1.2915 Thursday

Euro/dollar: UP at $1.1075 from $1.1065

Dollar/yen: DOWN at 100.64 yen from 100.76 yen

New York - DOW: DOWN 0.1 percent at 17,895.88 (close)

Source: AFP