European markets muted as gas prices ease and traders await US jobs data

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A meter shows the gas pressure in pipelines at a plant in Vecses, Hungary. There has been a relief rally in markets, as energy prices have steadied. Photo: Karoly Arvai/Reuters

Stocks in Europe were treading water on Friday morning after a retreat in gas prices, and as traders await US jobs data later on.

In London, the FTSE 100 (^FTSE) was flat after opening, while the French (^FCHI) followed suit and the DAX (^GDAXI) was 0.2% lower in Germany.

The muted mood came after a decline in European natural gas prices, with the benchmark future down 10.73% to post its biggest daily loss since August. However, prices are still up almost five-fold since the start of the year.

“There has been a relief rally in the UK, as energy prices have steadied and as investors have been tempted back on valuation grounds following a difficult few trading sessions which has depressed share prices,” Richard Hunter, head of markets at Interactive Investor.

“Some sterling weakness is also propping up the FTSE100 given its majority exposure to overseas earnings, while the more domestically focused FTSE250 has also recouped some losses following some buying on the dip from investors still keen on the UK economic recovery story.”

Read more: Energy price cap rethink sparks fears of higher bills

Across the pond, S&P 500 futures (ES=F) and Dow futures (YM=F) rose 0.2%, and Nasdaq futures (NQ=F) were more than 0.1% higher as trade began in Europe.

Investors will be watching for key US jobs data later today, at 1:30pm UK time, which may indicate the timing of Federal Reserve tapering. It is the last report before the Fed’s next decision in early November.

The consensus is that 500,000 jobs will have been added in September. Last month the report significantly underwhelmed expectations, coming in at just 235,000, which was well beneath the 733,000 consensus forecast, and the slowest pace since January.

On Thursday night, the US Senate voted to stave off a credit default that would have sparked a recession as Democrats and Republicans agreed to a stop-gap fix to raise the nation’s debt limit.

Watch: United States steps back from debt cliff… for now

The move defers the crisis until 3 December by adding another $480bn to the allowable national debt. It came with an estimated 11 days to go until the country would no longer have been able to borrow money or pay off loans for the first time in its history.

Asian shares rose overnight, taking their lead from the tech rally on Wall Street. Chinese shares returned from a one-week holiday on an upbeat note after a key survey showed that the country’s service sector returned to growth last month.

In Japan, the Nikkei (^N225) climbed 1.3% after rallying in the previous session, while Hang Seng (^HSI) rose 0.3% and the Shanghai Composite (000001.SS) was 0.7% higher.

Elsewhere, Australian shares rose on the day thanks to a boost in mining stocks amid surging commodities prices.

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