UK election result boosts pound, shares; US jobs data eyed

AP News
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Posted: May 08, 2015 7:43 AM
UK election result boosts pound, shares; US jobs data eyed

TOKYO (AP) — British shares and the pound jumped higher on Friday, leading gains globally, after election results showed the Conservative Party has won enough support to form a stable government.

Investors were also keeping a close eye on upcoming U.S. jobs figures for signs of growth in the world's largest economy.

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KEEPING SCORE: Britain's FTSE 100 soared 2 percent to 7,025.71 and Germany's DAX added 0.7 percent to 11,481.70. France's CAC 40 rose 0.9 percent to 5,012.92. U.S. markets looked set for gains, with Dow and S&P 500 futures both up 0.2 percent.

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UK ELECTION: The Conservative Party surged to get a majority lead in Britain's parliamentary election, meaning Prime Minister David Cameron will remain in his office at 10 Downing Street. The clarity of the result eased concerns among investors, who had been worried that an uncertain outcome could lead to days of political haggling to create a new government. The pound jumped 2 percent overnight against the dollar to its highest level since February. It mostly held onto the gains Friday, trading at $1.5423.

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ANALYST TAKE: "The U.K. general election result is a surprisingly market-friendly outcome and removes the risk that the economy suffers a prolonged period of political uncertainty," said Vicky Redwood from Capital Economics in London.

In the longer-term, however, a Conservative win means the U.K. will hold a referendum within two years about leaving the European Union, a big decision that could unsettle business confidence.

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US JOBS: Looking ahead, jobs data due out Friday are expected to show U.S. employers added 215,000 jobs in April and the unemployment rate ticked down to 5.4 percent. March's employment jobs report was much weaker than Wall Street had anticipated but may be revised.

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CHINA TRADE: The customs administration released data showing a deteriorating trade performance in April from the year before and much worse than forecast. Exports fell 6.4 percent and imports tumbled 16.2 percent. It was a sour note to end the week given China's huge role as a driver of regional growth, but raised hopes in Asia for more stimulus.

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ASIA'S DAY: Japan's Nikkei 225 rose 0.5 percent to 19,379.19 and Hong Kong's Hang Seng added 1.1 percent to 27,577.34. South Korea's Kospi shed 0.3 percent to 2,085.52 while the Shanghai Composite Index advanced 2.3 percent to 4,205.92. Australia's S&P/ASX 200 dropped 0.2 percent to 5,634.60, while shares in Southeast Asia were higher. India's Sensex gained 2.0 percent to 26,964.65 and New Zealand's market also gained.

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ENERGY: U.S. oil rose 45 cents to $59.39 a barrel in electronic trading on the New York Mercantile Exchange. It dropped $1.99, or 3.3 percent, to $58.94 per barrel on Thursday, the biggest drop in U.S. oil since April 8.

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CURRENCIES: The dollar rose to 120.10 yen from 119.73 yen on Thursday. The euro fell to $1.1227 from $1.1244.

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Follow Elaine Kurtenbach: www.twitter.com/ekurtenbach