Volkswacht Bodensee - Stocks rally fades as economic concerns return

The Dow Jones Industrial Average was flat after Wall Street indices opened with modest gain.

European markets were mostly lower after underwhelming Purchasing Managers' Index (PMI) survey data in Europe.

"It seems like sentiment has definitely been impacted by disappointing PMIs from European economies which came in below expectations in Italy and France," XTB analyst Walid Koudmani told AFP.

"Furthermore, the geopolitical situation continues to be troubling... in the Middle East conflict."

Israeli forces pushed on with intense strikes targeting Palestinian militants in Gaza on Monday as the war neared one month and the Hamas-run health ministry's death toll approached 10,000 inside the besieged territory.

Determined to destroy Hamas whose October 7 attack left 1,400 dead in Israel and saw over 240 hostages taken, Prime Minister Benjamin Netanyahu has vowed no letup despite mounting international calls for a ceasefire.

Back in Asia, equities rallied following another strong performance before the weekend on Wall Street, as below-forecast US jobs data fanned optimism that the Federal Reserve had reached the end of its interest-rate hiking cycle aimed at taming inflation.

After a tough year for traders, the Fed's decision last week to pause on monetary policy for a second meeting and hint that it would not tighten further has provided some much-needed vigour, and sparked talk of a new year cut.

Those hopes were given a boost Friday by figures showing far fewer jobs than expected were created in October, while other data pointed to a slowing economy, easing pressure on policymakers to lift rates further.

"The recent deluge of (US) economic data does not paint a picture of an impending recession," said SPI Asset Management analyst Stephen Innes.

All three main indexes on Wall Street jumped Friday after the jobs reading, which also fuelled bets on an interest rate cut by June, while Treasury yields eased back from 16-year highs.

Observers now say the road is open for equities to end the year on a strong note.

"There should be some natural cooling after that hot run, but what remains notable at this point is that there isn't any concerted selling interest after such a massive move," said market analyst Patrick O'Hare at Briefing.com.

Expectations that the Fed would not lift rates any further also kept downward pressure on the dollar, with the yen holding its gains after rallying at the end of last week, having come within a whisker of a three-decade low.

Oil prices ticked higher after key producers Saudi Arabia and Russia said they would stick to their output curbs until the end of the year.

The news came after the commodity fell more than six percent last week as investors grew optimistic that the Israel-Hamas conflict would not spill over into a wider war in the crude-rich Middle East.

- Key figures around 1330 GMT -

New York - Dow: UP 0.2 percent at 34,136.34 points

London - FTSE 100: UP 0.3 at 7,442.37

Frankfurt - DAX: DOWN 0.2 percent at 15,164.27

Paris - CAC 40: DOWN 0.3 percent at 7,029.24

EURO STOXX 50: DOWN 0.2 percent at 4,167.35

Tokyo - Nikkei 225: UP 2.4 percent at 32,708.48 (close)

Hong Kong - Hang Seng Index: UP 1.7 percent at 17,966.59 (close)

Shanghai - Composite: UP 0.9 percent at 3,058.41 (close)

Euro/dollar: UP at $1.0742 from $1.0731 on Friday

Pound/dollar: UP at $1.2398 from $1.2380

Dollar/yen: UP at 149.82 yen from 149.39 yen

Euro/pound: UNCHANGED at 86.67 pence

Brent North Sea crude: UP 1.4 percent at $86.11 per barrel

West Texas Intermediate: UP 1.7 percent at $81.85 per barrel

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K.Sutter--VB