September 1, 2016 / 12:57 PM / 2 years ago

GLOBAL MARKETS-Shares snap losing streak as oil rout eases

* European shares rise, world stocks snap six days of falls

* Oil prices steady after heavy losses in recent days

* China official PMI edges up, but private survey slips

* Pound gains after from rebound in UK manufacturing PMI

* Wall Street set to open 0.2 pct high amid data deluge

By Marc Jones

LONDON, Sept 1 (Reuters) - Gains in Europe helped pull world shares out their longest losing streak of the year on Thursday, although oil prices were beginning to slide again and bonds took a hit before key U.S. jobs data.

Markets were juggling a host of issues, including lacklustre data from Asia’s two biggest economies, the ousting of Brazil’s president and signs that Spain’s political impasse would continue.

Nevertheless, Europe’s main stock markets gained 0.8 percent to help MSCI’s All World index end six days of losses, its longest since the start of January.

Talk of a Deutsche Bank takeover of Commerzbank made banks the top gainers. Commodity companies had been up there too but wilted quickly as oil buckled again adding to the 8 percent it had already lost this week.

That decline had accelerated on Wednesday after data showed U.S. crude and distillate stockpiles increased more than expected.

Brent crude futures had initially bounced but then sank to $46.57 per barrel to add to the 3 percent lost overnight. U.S. crude skidded to $44.34 after shedding 3.6 percent on Wednesday. They had notched up 11 percent and 7 percent gains respectively in August.

After the data from Asia, European surveys showed euro zone manufacturing growth slowed, although Britain staged one of its sharpest rebounds on record as factories recovered from June’s vote to leave the European Union.

The pound rose more than a cent to $1.3250, which put it on course for its best day in two weeks.

“(British) companies reported that work that had been postponed during July had now been restarted, as manufacturers and their clients started to regain a sense of returning to business as usual,” Markit economist Rob Dobson said.

Spanish government bond yields touched a three-week high of 1.026 percent after acting Prime Minister Mariano Rajoy lost a vote of confidence in parliament, raising the prospect of a third election in a year.


Futures markets were pointing to modest 0.2 to 0.3 percent gains for Wall Street with a packed day of economic data ahead.

Friday’s U.S. nonfarm payrolls report remains this week’s key market focus after Federal Reserve Vice Chair Stanley Fischer said last week the jobs data will be a factor in the timing of central bank interest rate hikes.

Employers are expected to have added 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters.

The ADP National Employment Report on Wednesday showed U.S. private employers adding 177,000 jobs in August, above the 175,000 forecast by a Reuters survey of economists, and contracts to buy previously owned homes surged in July ,

The dollar’s gains had been tempered by weaker-than-expected Institute for Supply Management-Chicago business barometer data, but the U.S. currency was slowly starting to strengthen again.

It climbed a third of cent to 103.76 yen and nudged the euro down to 1.1141 though it couldn’t fend off soaring sterling.

Gold meanwhile slipped to a fresh two-month low of $1,306.25 tracking the weakening in the bond markets were benchmark 10-year U.S. Treasuries were back above 1.6 percent.

In Asia overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan ended down 0.2 percent, while Australia’s S&P/ASX 200 index shed 0.3 percent.

One of the drags was private-sector data showing that Chinese manufacturing activity stagnated in August. Growth in output and new orders slowed and companies shed staff for the 34th month in a row.

In Japan, manufacturing activity showed signs of steadying, but the HIS Markit/Nikkei PMI remained below the 50 mark that separates expansion from contraction, edging up to 49.5 in August from 49.3 in July.

Output grew for the first time in six months, but export orders fell again, bolstering expectations the Bank of Japan will need to offer more stimulus to revive the sputtering economy and that the Fed may be wary about hiking U.S. rates.

“There are still some sceptics who are still not convinced that the Fed will take action (on rates) again this year,” said Antje Praefcke, currency strategist at Commerzbank.

“They have been misled by the Fed one too many times over the past few months in their hope for a rapid rate hike cycle following the lift-off.”

For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=

Additional reporting by Lisa Twaronite in Tokyo and Anirban Nag in London

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