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Markets stay buoyed by US jobs figures

Pan Pylas, AP Business Writer

People walk by an electronic stock indicator in Tokyo Monday, Aug. 6, 2012. Asian stock markets rose sharply in early trading Monday, boosted by stronger-than-expected U.S. hiring figures for July following three months of weak job gains. (AP Photo/Shizuo Kambayashi)

LONDON (AP) -- Financial markets remained in a buoyant mood Monday by figures showing the U.S. economy generated a greater than expected amount of jobs in July and by a growing belief that the European Central Bank could do more in the months ahead to contain the continent's debt crisis.

With little scheduled economic news due, Friday's figures showing the U.S. economy adding 163,000 jobs in July continued to drive sentiment. Though the figures eased concerns over the world's largest economy, the rise in the unemployment rate to 8.3 percent provided more evidence, if any were needed, that the recovery is patchy.

The figures were welcomed after three months when payrolls failed to meet expectations. The data also helped markets clamber off lows registered on Thursday when investors were disappointed by comments from European Central Bank president Mario Draghi.

"Those bumper non-farm payroll figures on Friday seem to be providing markets with a lasting distraction from the ongoing woes of the eurozone," said Fawad Razaqzada, market strategist at GFT Markets.

In Europe, Germany's DAX closed up 0.7 percent at 6,918 while the CAC-40 in France rose 0.8 percent to 3,401. The FTSE 100 index of leading British shares was 0.4 percent higher at 5,808.

It's been an eventful day on Madrid's main stock exchange. After a five-hour blackout blamed on a technical glitch, the IBEX 35 closed up 4.4 percent when trading restarted.

In the U.S., the Dow Jones industrial average was up 0.5 percent at 13,165 while the broader S&P 500 index rose 0.5 percent to 1,397.

Also helping to shore up markets has been a bit of a reassessment of Draghi's comments last Thursday. Though Draghi failed to meet market expectations at the time, investors have turned a little more positive.

"Despite last week's disappointment, Draghi's comments did suggest assistance in the near future and this is likely to increase risk appetite," said James Hughes, chief market analyst at Alpari.

That reassessment has helped ease the pressure on Spain and the country's 10-year yield dipped further below the 7 percent threshold that is widely-considered unsustainable in the long-run. It's down a further 0.11 percentage points to 6.71 percent, having spiked up above 7 percent in the aftermath of Draghi's comments.

Spain remains the epicenter of Europe's debt crisis especially as concerns over whether Greece will get its next batch of bailout cash have diminished. Weekend comments from the country's debt inspectors suggest that progress has been made.

Last Friday, Spain's Prime Minister Mariano Rajoy came close to acknowledging that he has considered a sovereign bailout for the country. He told reporters he would consider asking for financial aid only once the ECB had fleshed out its crisis-fighting plans for buying government bonds.

And the euro was steady having recovered the losses it posted following Draghi's comments on Friday. It was up a further 0.25 percent at $1.2418 on Monday.

A weekend statement by the People's Bank of China indicating it would intensify policy fine-tuning also helped investment sentiment in Asia earlier.

That was among factors helping to lead Asian stock markets sharply higher.

Japan's Nikkei 225 index rose 2 percent to finish at 8,726.29 and Hong Kong's Hang Seng climbed 1.7 percent to 19,998.72. South Korea's Kospi added 2 percent to 1,885.88.

Oil markets were steady having pushed above $90 a barrel on Friday. Benchmark crude was up 58 cents at $91.98 a barrel in electronic trading on the New York Mercantile Exchange.