Fears of soft U.S. jobs data hit shares, dollar firm

Fri Apr 5, 2013 8:14am EDT
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By Richard Hubbard

LONDON (Reuters) - European shares hit a one-month low on Friday as investors fretted about U.S. jobs data later in the day and sold airline stocks on fears of a bird flu outbreak in Asia, while euro zone bonds gained on talk of Japanese demand.

Traders have become increasingly nervous about the prospect of a weaker than expected U.S. non-farm payrolls report for March, due out at 8.30 a.m. ET, after disappointing data this week on manufacturing activity and private sector hiring.

The FTSEurofirst 300 index .FTEU3 of Europe's top companies was down 1.5 percent at 1,163.40, a one-month low, after falling 1.1 percent in the previous session. It is still up about 2.5 percent so far this year, however.

"Recent weakness in global economic data has certainly spooked investors and prompted them to stay very cautious," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets. "If U.S. jobs data turns out to be weaker than anticipated, it would certainly add to already jittery sentiment."

London's FTSE 100 .FTSE, Frankfurt's DAX .GDAXI and Paris's CAC-40 .FCHI were up to 1.7 percent lower. .L .EU

A drop of around 0.6 percent in U.S. stock futures suggests a lower start on Wall Street, although much depends on the jobs data which comes out before the market opens. .N

An improving U.S. economic growth trend has encouraged investors to take on more risk this year, although any signs of weakness would also encourage hopes that the Federal Reserve will sticks to its massive bond-buying program.

The payrolls report is expected to show employers added 200,000 jobs last month, below the 236,000 created in February, leaving the unemployment rate steady at 7.7 percent, according to a Reuters poll of economists.   Continued...

Workers speak above an electronic information board at the London Stock Exchange in the City of London January 2, 2013. REUTERS/Paul Hackett