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Shares mixed, Wall Street drops on trade worries as oil surges

Stock markets around the world were mixed, with US shares retreating yesterday amid continuing concerns over US-China trade ties, while pledges by key oil producers to trim output boosted oil prices.

Oil prices surged four per cent after big Middle East producers in Opec agreed to reduce output to drain global fuel inventories and support the market.

Shares on Wall Street fell more than one per cent, with a drop in technology stocks sparking a turnaround from earlier in the day amid the trade standoff.

US employers hired fewer workers than expected in November, supporting a view that US growth is moderating and the Federal Reserve may stop raising rates sooner than previously thought.

Nonfarm payrolls increased by 155,000 last month, but missed economists expectation of 200,000.

The Dow Jones Industrial Average fell 360.85 points, or 1.45 per cent, to 24,586.82, the S&P 500 lost 38.23 points, or 1.42 per cent, to 2,657.72 and the Nasdaq Composite dropped 137.53 points, or 1.91 per cent, to 7,050.73.

Wall Street was also weighed down by sinking technology shares with Apple Inc down more than two per cent.

MSCI's gauge of stocks across the globe shed 0.36 per cent.

European shares staged a small recovery after three days of heavy losses, amid  worries the US-China trade row may slow world economic growth. The euro zone’s STOXX index closed up 0.6 per cent.

US stock futures had pared losses to move higher yesterday after the jobs report, but the advance was shortlived.

Stock markets around the world tumbled on Thursday after Canadian officials arrested the chief financial officer of Chinese smartphone-maker Huawei for extradition to the US.

The arrest was seen as an added threat to the two superpowers reaching a trade resolution.

Also contributing to this week’s selloff were rising concerns about a US economic slowdown signalled by a flattening Treasury yield curve.

The entire yield curve steepened yesterday, while the front half of the yield curve remained inverted after two-year and three-year yields rose above five-year yields for the first time in over a decade earlier this week. That inversion has stoked speculation as to whether a US recession is looming.

The US dollar weakened against major currencies after the US jobs data, which backed a view that US growth is moderating and the Federal Reserve may stop raising rates sooner than previously thought.

The dollar index, tracking it against six major currencies, fell 0.05 per cent, with the euro up 0.09 per cent to $1.1384.

Oil prices jumped more than four per cent as Saudi Arabia and other producers in Opec, as well as allies in Russia agreed to reduce output.

Brent crude rose $2.94, or 4.4 per cent, to $63.00 a barrel. US crude rose 4.3 per cent to $53.70 a barrel, after earlier reaching a session high of $54.22.

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