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Stock markets rise ahead of US jobs report

Carlo Piovano, Associated Press

Tokyo Stock Exchange employees work at the computer terminal in Tokyo, Friday, July 5, 2013. Optimism that easy European and U.S. monetary policy will continue boosted Asian stock markets Friday as investors awaited a key American jobs report later in the day. Tokyo's Nikkei 225 was up 1.8 percent to 14,272.45. (AP Photo/Itsuo Inouye)(AP Photo/Itsuo Inouye)

LONDON (AP) -- Optimism that the world's major central banks will keep borrowing costs down boosted world stock markets Friday as investors awaited a key U.S. jobs report later in the day.

The prospect of continued monetary stimulus helped offset worries earlier in the week of a Chinese slowdown, a reemergence in European debt woes and the disruption of energy markets due to the military ouster of Egypt's president.

The biggest jumps were in Asia, where markets were catching up with the gains in Europe the day before. The rally was trigged by the European Central Bank President Mario Draghi's statement that interest rates will remain low "for an extended period of time."

The ECB statement was echoed by the Bank of England and followed indications that the U.S. economy is growing — but probably not fast enough for the U.S. Federal Reserve to rush into tapering off its stimulus program. Markets had been spooked in recent weeks at the prospect of such stimulus ending.

Tokyo's Nikkei 225 closed up 2.1 percent to 14,309.97 and Hong Kong's Hang Seng added 1.9 percent to 20,854.67

In early European trading, Britain's FTSE 100 was up another 0.6 percent to 6,458.85 after jumping 3 percent the day before. Germany's DAX, however, edged down 0.2 percent to 7,979.19 while France's CAC-40 slipped 0.2 percent to 3,799.47.

Futures augured gains on Wall Street after the Independence Day holiday. Dow futures climbed 0.9 percent to 15,051 and S&P 500 futures gained by the same percentage to 1,623.10.

Investors were waiting for the U.S. government's monthly report on jobs due later Friday. Earlier in the week, Wall Street rallied after ADP, a payrolls processor, said that businesses added more jobs last month than analysts had expected. If the U.S. government confirms that Friday, it offers hope that the country's recovery is continuing.

Economists predict that the government will report that employers added 165,000 jobs last month, roughly in line with May's increase. The unemployment rate is expected to stay at a still-high 7.6 percent. Another solid month of hiring in June could signal the start of a stronger second half of the year for the U.S. economy.

But the market reaction may be mixed if the number is too strong, as that could lead some to believe the Fed will speed up the tapering of its stimulus program.

Elsewhere in Asia, Taipei's TAIEX jumped 1.4 percent to 8,001.82 while Sydney's S&P/ASX 200 edged up 1 percent to 4,841.70 and China's Shanghai Composite posted a small gain of 0.1 percent to 2,007.29.

Seoul's KOSPI fell 0.3 percent to 1,833.31 after shares of Samsung Electronic dropped nearly 4 percent after its quarterly operating profit failed to meet market expectations. The company estimated April-June earnings at a record high 9.5 trillion won ($8.3 billion) but that was below analysts' forecasts and investors are worried profit growth could slow as smartphone sales in rich nations reach a saturation point.

Benchmark crude for August delivery was down 21 cents at $101.03 a barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro fell to $1.2879 from $1.2902. The dollar fell to 99.98 yen from 100.23 yen late Thursday.


Kay Johnson in Bangkok contributed to this report.