European shares creep lower, eyes on U.S. jobs data

Reuters

* FTSEurofirst 300 off 0.1 percent

* Market stuck in tight trading range

* U.S. non-farm payrolls due at 1230 GMT

By Tricia Wright

LONDON, Sept 6 (Reuters) - European shares saw a tentativemove lower on Friday, with investors cautious before a U.S. jobsreport that could determine when the Federal Reserve startsscaling back its monetary stimulus.

The FTSEurofirst 300 was down 0.1 percent at1,222.96 points by 1030 GMT, having been trapped in a tight5.6-point trading range in Friday's session. The euro zone'sblue-chip Euro STOXX 50 was flat at 2,773.46 points.

The U.S. non-farm payrolls report, due at 1230 GMT, will bescrutinised for clues on whether the U.S. recovery is strongenough to allow the Fed to move to taper asset purchases as soonas this month.

The world's biggest economy is expected to have added180,000 non-farm jobs last month, keeping the unemployment ratesteady at 7.4 percent.

Analysts, however, say the data could top forecasts in lightof encouraging U.S. economic data in the past few days,particularly non-manufacturing ISM figures.

Societe Generale strategist Paul Jackson reckoned thatfigures of 220,000 for non-farm jobs added and 7.3 percent forthe unemployment rate would still constitute a positivesurprise, but that any equity market reaction would be muted.

"If you get a strong number then that probably just puts thenail in the coffin as far as tapering (starting this month) is concerned ... and that may cause equity markets to sell off alittle bit, but I think any selling off will be extremelylimited," he said

"I believe that the stronger the data, the better, because Iwant economies on both sides of the Atlantic to be growing; Ithink that will, in the end, be beneficial for Europeanequities."

While Friday's trade saw the FTSEurofirst 300 on a slightlyweaker footing, the index has risen 2.3 percent so far thisweek, putting it on track for its best weekly showing sincemid-July.

Signs of an economic recovery in Europe have promptedseveral strategists to raise their ratings on European shares,with Citi and UBS both upgrading the region this week.

Meanwhile, U.S. investors added to their holdings ofEuropean equities for a 10th straight week in the seven days toSept. 4 as they switched out of domestic, emerging market andJapanese stocks, Lipper data showed.

Charles Stanley technical analyst Bill McNamara suggestedthat the Euro STOXX 50 was well supported around current levels,noting its recent pull-back was curtailed by the 50-day movingaverage, now at 2,746 points.

Further, at the recent low of 2,727 hit on Aug. 30 it hadretraced 38.2 percent - a Fibonacci level - of the previousadvance, "so it is clear that there are buyers when it getsclose to 2,700", he said.

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