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Markets tentative ahead of key US jobs report

Carlo Piovano, Associated Press

LONDON (AP) -- Stock markets were tentative Friday ahead of the latest U.S. jobs report, the most important monthly indicator for the world's largest economy.

Jitters remained over Syria's civil war and whether the U.S. would launch a punitive strike against President Bashar Assad's regime for a chemical attack against civilians in suburban Damascus last month. But at the G-20 summit of world leaders in Russia this week, President Barack Obama failed to garner much support for military intervention.

Investors will in the meantime focus their attention on the official U.S. hiring figures for August later in the day. The so-called non-farm payrolls are the last major piece of economic data the Federal Reserve will get to see before it decides whether or not to pull back on its massive bond-buying program. That program has kept interest rates abnormally low and supported stock markets for months. While most investors believe the Fed will begin to pull back, the question has become when and how much.

Analysts predict a solid gain of 177,000 jobs for August — just below the monthly average this year of 192,000. The unemployment rate is expected to remain 7.4 percent.

Figures around such levels "should seal the case for Fed tapering to begin in September," said Gary Yau, analyst at Credit Agricole CIB.

By midmorning trading in Europe, Britain's FTSE 100 was down 0.1 percent to 6,528.24, while Germany's DAX was 0.2 percent lower at 8,222.90. France's CAC-40 was flat at 4,006.60.

Wall Street also looked set for slim losses, with Dow Jones industrial futures down 0.1 percent at 14,906. S&P 500 futures were nearly unchanged at 1,653.

Earlier, in Asia, Japan's Nikkei 225 fell on profit-taking after four sessions of gains. The benchmark index closed down 1.5 percent at 13,860.81. South Korea's Kospi rose 0.2 percent to 1,955.31. Australia's S&P/ASX 200 rose slightly to 5,145.

Stocks in Hong Kong and mainland China have posted gains in recent days after Chinese manufacturing data showed the slowdown in the world's No. 2 economy is stabilizing.

"Investors are more bullish now and the stock market is poised for a rebound," said Francis Lun, chief economist at GE Oriental Financial Group in Hong Kong. "It is a change in investor sentiment."

Hong Kong's Hang Seng added 0.1 percent to 22,621.22. The Shanghai index advanced 0.8 percent to 2,139.99. The smaller Shenzhen Composite Index rose 0.5 percent to 1,030.76.

Benchmark crude for October delivery was up 36 cents to $108.73 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.14 to close at $108.37 on Thursday.

In currencies, the euro was flat around $1.3115 compared with the day before. The dollar fell to 99.63 yen from 100.14 yen.

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Pamela Sampson in Bangkok contributed to this report.