Growth outlook lifts shares as Fed taper talk helps dollar

Mon Nov 11, 2013 8:09am EST
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By Richard Hubbard

LONDON (Reuters) - Signs of a solid U.S. recovery boosted world equities on Monday although concern that this may encourage the Federal Reserve to reduce its economic stimulus put pressure on emerging markets.

Surprisingly strong U.S. jobs data on Friday brought forward expectations for when the Fed could start tapering its stimulus, lifting Treasury bond yields and the dollar without curtailing demand for shares on Wall St or in other major markets. .N

U.S. stock index futures signaled a steadier session as the Veterans Day holiday limits activity.

"Tapering could well come earlier than March now, but people believe there is a little more upside as there were plus points in the (jobs) data," Alastair Winter, chief economist at brokerage Daniel Stewart, said.

Fed officials, including Chairman Ben Bernanke, have sounded cautious about the prospect for early tapering since the jobs data though many investors are waiting for Bernanke's nominated successor, Janet Yellen, to give her views before the U.S. Senate on Thursday.

"Janet Yellen is going up to the Senate and they are going to ask her about the taper. She is not going to say 'I'm not telling you'," Winter said.

Meanwhile the expectations for U.S. growth helped lift European shares .FTEU3 by 0.1 percent and off one-week lows during a subdued morning session. .EU

Earlier the recovery hopes had boosted Japan's Nikkei by a hefty 1.3 percent .N225, lifting it from one-month lows.   Continued...

A traffic controller at a constructing site is reflected on a stock quotation board at a brokerage in Tokyo October 1, 2013. REUTERS/Issei Kato