World stocks rise on strong US payrolls report

Equities markets rose worldwide on a bump from positive US data, though US stocks and long-dated Treasury yields fell along with oil prices amid investor caution ahead of Friday's US non-farm payrolls report for June.

Oil prices slumped more than 4 per cent, wiping out Wall Street's early gains, after the US government reported that a drop in weekly crude stockpiles was close to analysts' forecasts but far less than the decline expected by market optimists.

Brent crude fell $2.31 to $46.49 a barrel and US crude dropped $2.22 to $45.22 a barrel.

“It seems like it's just an oil story today,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "And obviously we're setting up for the jobs report tomorrow; perhaps there's some positioning going on there.”

US stocks

US equities opened higher as strong private-sector employment data and a drop in jobless claims pointed to a steadying labour market ahead of the key monthly payrolls report, but reversed course to follow oil prices lower.

The Dow Jones industrial average fell 22.74 points, or 0.13 per cent, to 17,895.88, the S&P 500 lost 1.83 points, or 0.09 per cent, to 2,097.9 and the Nasdaq Composite added 17.65 points, or 0.36 per cent, to 4,876.81.

The US Labour Department will release its monthly report Friday and investors are anxiously anticipating the data after May's disappointing number called into question the strength of the American job market.

ADP payrolls data

Thursday's ADP national employment report showed that 172,000 jobs were added in the private sector in June, surpassing economists' expectation of 159,000.

ADP data showed private payrolls rose 168,000 in May, but the government's nonfarm payrolls data that month reported a gain of only 38,000 jobs, the smallest since September 2010.

Emerging market stocks were buoyed by the robust US data as well as signals that even with strong job growth, there was little chance the Federal Reserve would raise US overnight interest rates because of global growth concerns.

European markets finished higher, reversing a three-day slide with London's FTSE up 1.09 per cent. The CAC in Paris rose 0.8 per cent and Germany's DAX was 0.49 per cent higher. The pan-European FTSE 300 gained 0.96 per cent.

MSCI's global gauge of stocks rose 0.3 per cent.

Pound sterling

The British pound, which fell below $1.30 against the US dollar for the first time since 1985 on Wednesday, again turned lower. It was last down 0.15 per cent to $1.2910.

Sterling is down more than 13 per cent since Britain voted on June 23 to exit the European Union, with some analysts expecting it to drop to $1.20 in coming months as the Bank of England prepares to ease monetary policy.

The dollar was 0.55 per cent lower at 100.76 yen, holding above its trough of 99 hit the day after the British vote.

The strong yen has battered Japanese equities, with Japan's Nikkei stock index falling for a third straight session.

US Treasury yields

US 30-year Treasuries rose 8/32 in price to yield 2.14 per cent. The 30-year note hit a record low of 2.098 per cent on Wednesday. Benchmark 10-year Treasuries were little changed in price to yield 1.39 percent after touching a record low of 1.321 per cent Wednesday.