Stocks gain while dollar retreats as US labor market cools

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Stock markets rose Friday as cooling US job growth raised hopes of interest-rate cuts, while London hit another record high following speculation of a bidding war for mining giant Anglo American.

Investors had been keenly awaiting the data, as the US non-farm payrolls (NFP) figures are key to the Federal Reserve's decision-making on when to lower interest rates.

The Fed kept rates at a 23-year high on Wednesday to fight stubborn inflation.

Hiring in the world's biggest economy came in at 175,000 last month, down from a revised March figure of 315,000, while wages rose by 0.2 percent, said the US Department of Labor.

Analysts at Forex.com had expected the US economy to add 238,000 jobs last month, and wages to increase by 0.3 percent month on month.

"This is a rare miss for the US jobs market which could potentially spell the end of the 'higher for longer' rhetoric we have become accustomed to," said Mahmoud Alkudsi, senior market analyst at Abu Dhabi-based financial services firm ADSS.

A string of data this year showing inflation was holding stubbornly above target, while the economy and labor market remain resilient, has seen the Fed indicate it will have interest rates higher for longer.

Markets had started the year expecting the Fed would cut rates six times this year, but those expectations dwindled to one or two.

"It was good enough to show the market that the economy should continue to grow, which is a good thing for earnings," Patrick O'Hare of Briefing.com said of the jobs report.

At the same time, the figures were likely to "validate" Fed Chair Jerome Powell's belief that the next policy move is unlikely to be a rate hike.

The dollar slid against its main rivals after the data was released.

"We will also see weaker US bond yields, with risk assets continuing to see upside," he added.

All three major US indices gained more than one percent.

- London stocks set record high -

European stocks also rose, with London setting a new record high as Anglo American shares vaulted more than three percent to top London's risers after a report that Swiss-based commodities giant Glencore was considering a move on the British group.

The speculation emerged one week after Anglo rejected a blockbuster $39 billion takeover bid from Australian rival BHP, dismissing it as highly unattractive and opportunistic.

Anglo and Glencore declined to comment on the Reuters report, which cited unidentified sources.

London's benchmark FTSE 100 index of top companies extended its record-breaking run to strike a new high at 8,248.73 points, dragging Frankfurt and Paris higher in its wake.

"A bidding war for an FTSE beast like Anglo would be just what investors have been hankering for," Finalto analyst Neil Wilson told AFP.

BHP's colossal bid aims to create the world's biggest-listed producer of copper, which is expected to face a demand boom due to its pivotal use in renewable energy technology like electric vehicles and solar panels.

Anglo shares finished the day up 1.2 percent, which those of Glencore shed 1.4 percent.

In Asia, Hong Kong led gains on a surge in tech giants due to forecast-busting results and a huge stock buyback from industry bellwether Apple, while the yen extended gains against the dollar on revived hopes for US interest rate cuts.

- Key figures around 2250 GMT -

New York - Dow: UP 1.2 percent at 38,675.68 (close)

New York - S&P 500: UP 1.3 percent at 5,127.79 (close)

New York - Nasdaq Composite: UP 2.0 percent at 16,156.33 (close)

London - FTSE 100: UP 0.5 percent at 8,213.49 (close)

Paris - CAC 40: UP 0.5 percent at 7,957.57 (close)

Frankfurt - DAX: UP 0.6 percent at 18,001.60 (close)

EURO STOXX 50: UP 0.6 percent at 4,921.48 (close)

Hong Kong - Hang Seng Index: UP 1.5 percent at 18,475.92 (close)

Tokyo - Nikkei 225: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Dollar/yen: DOWN at 152.99 yen from 153.64 yen on Thursday