Volkswacht Bodensee - Stocks retreat as traders eye geopolitics, US jobs data

The geopolitical outlook remained a major uncertainty for traders after the US toppled Venezuela's president and amid simmering tensions between China and Japan.

London, Paris and Frankfurt stock markets were all lower in midday trading.

European defence stocks, however, gained on the geopolitical concerns, with President Donald Trump calling to hike the US defence budget by 50 percent next year.

Britain's BAE systems jumped five percent, while Germany's Rheinmetall and Italy's Leonardo also rose.

Investors were also awaiting the release of US data on job openings and unemployment claims later Thursday.

They are followed Friday by the closely watched reading on non-farm payrolls, a crucial guide for Federal Reserve decision-makers, who meet at the end of the month amid debate on whether they will cut interest rates for a fourth successive time.

"With a March rate cut essentially priced in as a coin-toss, tomorrow's jobs report does provide the basis for a potential market-moving event if we see any particularly strong deviation from expectations," said Joshua Mahony, chief market analyst at Scope Markets.

Equity markets in Asia struggled Thursday, with Hong Kong, Shanghai and Tokyo all closing lower.

Tokyo stocks were weighed down after China announced an anti-dumping probe into imports from Japan of a key chemical used in making semiconductors, a day after it banned the export to the country of goods with potential military uses.

The move adds to rising diplomatic tensions between the Asian giants since Japanese Prime Minister Sanae Takaichi suggested in November that Japan may react militarily in any attack on Taiwan.

Seoul edged higher to another record close, though tech giant Samsung fell back after saying it expected its fourth-quarter profit to reach a record $13.8 billion.

Oil prices rebounded after suffering a second steep fall in a row Wednesday on Trump's comments that Venezuela would turn over millions of barrels to the United States following its ouster of President Nicolas Maduro.

Traders will also be keeping an eye on a US Supreme Court ruling due Friday on the legality of Trump's punishing tariffs.

The landmark case on his unprecedented use of powers for sweeping global levies strikes at the heart of his economic agenda, and a tariffs reversal could further upend US trade with countries worldwide.

- Key figures at around 1100 GMT -

London - FTSE 100: DOWN 0.2 percent at 10,023.97 points

Paris - CAC 40: DOWN 0.2 percent at 8,212.88

Frankfurt - DAX: DOWN 0.1 percent at 25,086.83

Tokyo - Nikkei 225: DOWN 1.6 percent at 51,117.26 (close)

Hong Kong - Hang Seng Index: DOWN 1.2 percent at 26,149.31 (close)

Shanghai - Composite: DOWN 0.1 percent at 4,082.98 (close)

New York - Dow: DOWN 0.9 percent at $48,996.08 (close)

Euro/dollar: DOWN at $1.1680 from $1.1682 on Wednesday

Pound/dollar: DOWN at $1.3450 from $1.3462

Dollar/yen: UP at 156.68 yen from 156.60 yen

Euro/pound: UP at 86.86 from 86.80 pence

Brent North Sea Crude: UP 1.2 percent at $60.67 per barrel

West Texas Intermediate: UP 1.2 percent at $56.68 per barrel

B.Wyler--VB