Markets cautious ahead of US jobs data

Caution reigned on most stock markets Wednesday as traders reacted to mixed regional data ahead of key US jobs numbers due later in the week. Wall Street stocks were trading modestly lower after the ADP payrolls firm said Wednesday that US businesses added a solid 177,000 new staff in July. Analysts said the ADP data supports the consensus forecast that the Labor Department will report a 180,000 gain in public and private sector payrolls on Friday, down from 255,000 the previous month but still seen as strong. Markets believe a good jobs report may be key in convincing the Federal Reserve that the US economy is ready to handle another hike in interest rates, possibly as soon as in September. London's benchmark FTSE 100 index ended the day 0.6 percent lower, with falling oil prices hitting energy shares and commodities companies tumbling under pressure on the prospect of a US interest rate hike, which would likely raise the value of the dollar and hurt trading in dollar-denominated materials. In the eurozone, Frankfurt's DAX 30 shed 0.6 percent. "Both German retail sales and employment data came in better than expected, however their impact on the markets should be only temporary as they will neither herald a change in direction by the ECB nor indicate a major acceleration in economic activity," said Markus Huber, a trader at City of London Markets. Eurozone inflation and jobless levels have fallen short of analyst forecasts, official data showed Wednesday, amid speculation that the European Central Bank will have to adopt more stimulus measures. The official EU statistics agency Eurostat said eurozone consumer prices rose 0.2 percent in August, the same rate as in July. Eurozone unemployment meanwhile was unchanged at 10.1 percent in July. The DAX dipped despite a spike in banking shares on a rumour, quickly denied, that market leader Deutsche Bank would gobble up its main competitor Commerzbank. Deutsche Bank shares, which have lost half their value in the past year as the bank struggles to restructure itself and fend off lawsuits, shot up 2.5 percent nevertheless. Shares in Commerzbank jumped 3.4 percent. In Paris the CAC 40 had held in positive territory most of the day, buoyed by positive results from two of its top telecoms firms Iliad, whose shares shot up more than percent and Bouygues, which gained 1.1 percent. However it was dragged down as the day went on, closing 0.4 percent lower. In foreign exchange Wednesday, the euro was steady against the dollar, which however fell versus the British pound. Analysts pointed to data showing a recovery in British consumer confidence following a post-Brexit vote slump as handing a boost to sterling. "After recording its largest monthly fall in 26 years in July, the GfK/NOP composite index of consumer confidence picked up from minus 12 to minus 7 in August," noted Ruth Gregory, economist at Capital Economics research group. British Prime Minister Theresa May on Wednesday summoned her senior ministers for their first talks on exiting the European Union since the summer break amid reports of major divisions over how to proceed over Brexit. Tokyo stocks meanwhile rallied Wednesday as the yen fell further against the dollar on US interest rate talk -- but most other Asian markets struggled. - Key figures around 1530 GMT - London - FTSE 100: DOWN 0.6 percent at 6,781.51 points (close) Frankfurt - DAX 30: DOWN 0.6 percent at 10,592.69 (close) Paris - CAC 40: DOWN 0.4 percent at 4,438.22 (close) EURO STOXX 50: DOWN 0.1 percent at 3,027.16 New York - DOW: DOWN 0.4 percent at 18,378.38 New York - S&P 500: DOWN 0.4 percent at 2,167.17 New York - Nasdaq: DOWN 0.4 percent at 5,205.68 Tokyo - Nikkei 225: UP 1.0 percent at 16,887.40 (close) Shanghai - Composite: UP 0.4 percent at 3,085.49 (close) Hong Kong - Hang Seng: DOWN 0.2 percent at 22,976.88 (close) Euro/dollar: UP at $1.1147 from $1.1146 late on Tuesday Dollar/yen: UP at 103.46 yen from 103.02 yen Pound/dollar: UP at $1.311 from $1.3076