Global Shares Steady as U.S. Jobs Data Calms Economic Fears

Global shares firmed on Friday, driven by positive data on U.S. job market stability and China's step back from deflation. European stocks and oil prices also rose, alleviating early-week declines. Analysts foresee continued market volatility but take comfort in reassurances from the U.S. Federal Reserve and the Bank of Japan.

Global shares saw a firm uptick on Friday, bringing a turbulent week to a more stable conclusion as U.S. jobs data calmed fears of an economic downturn. Japanese and broader Asian stocks gained momentum, mirroring a Wall Street rally on Thursday that was driven by unexpected drops in U.S. jobless claims.

Market sentiment improved further with China showing signs of moving away from deflation, bolstering global stocks that had experienced sharp declines earlier in the week. Oil prices aimed for a weekly gain of nearly 3% amidst ongoing concerns over the Middle East situation.

The MSCI All Country stock index gained 0.3%, reclaiming much of its early-week losses. In Europe, the STOXX 600 index rose by 0.7%, effectively erasing weekly losses, while the VIX index indicated decreased market fears.

Financial experts highlight various factors affecting market movements, including diverging central bank policies, U.S. recession risk assessments, and August's reduced liquidity, which has heightened volatility. Investors will keep a close eye on upcoming central bank meetings, particularly the Federal Reserve's annual Jackson Hole summit.

The Bank of Japan's assurances on interest rates stabilized market sentiments further. Japan's Nikkei index closed 0.6% higher, and broad Asia-Pacific shares outside Japan gained 1.8%, reversing Thursday's losses.

Positive Chinese data showing a moderate consumer inflation rate of 0.5% in July also contributed to the recovery in market sentiment. Kyle Rodda of Capital.com noted that signs of sustainable U.S. growth and a weaker yen have helped stabilize markets. Federal Reserve officials expressed confidence in an eventual cooling of inflation, opening discussions around future rate cuts.

Bond yields rose as investor demand for safe havens declined. The U.S. 10-year yield stood at 3.9627%, up from Monday's low, while the two-year yield was at 4.0282%. Brent and U.S. crude oil prices remained steady but secured over 3% weekly gains. Gold prices eased slightly, registering a weekly drop.

(With inputs from agencies.)