Markets buoyant as focus turns to US

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By PAN PYLAS, Associated Press

LONDON (AP) — Solid manufacturing surveys from around the world combined with further evidence that the U.S. jobs recovery is continuing to help boost markets on Wednesday as concerns over Europe's debt crisis eased.

With figures showing that China's manufacturing sector is growing solidly and Europe's performing better than forecast, investors are hopeful that equivalent U.S. figures later will show the recovery in the world's largest economy gaining steam.

The monthly hiring survey from private payrolls agency ADP came in more or less in line with expectations and cemented market predictions that Friday's official government data will show a 180,000 or so improvement.

ADP said private employers added 170,000 jobs during the month, a little shy of expectations for a 185,000 increase but well down on December's downwardly-revised increase of 292,000.

Given the volatility of the survey, the outcome failed to dent confidence over Friday's nonfarm payrolls data.

"The ADP employment report displayed a still respectable picture for the health of the overall labor market," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York.

In Europe, the FTSE 100 index of leading British shares was up 1.3 percent at 5,755 while Germany's DAX rose 2.1 percent to 6,594. The CAC-40 in France was 1.4 percent higher at 3,348.

Wall Street was heading for a higher opening too — Dow futures were up 0.7 percent at 12,662 while the broader Standard & Poor's 500 futures rose by 0.7 percent to 1,317.

There's more U.S. economic data to come later, not least the Institute for Supply Management's monthly manufacturing survey. The release is one of the month's most closely-monitored.

The likely focus on the U.S. over the rest of the week will prove a welcome diversion for some traders from monitoring the daily grind of Europe's debt crisis.

There are signs that the crisis has eased, for now. EU leaders agreed this week to push ahead with a closer fiscal union and borrowing rates for Italy and Spain are down sharply from just a couple of months ago, suggesting increased investor confidence.

Much hinges on Greece, where the outlook also appeared brighter. Hopes were growing that a debt-reduction deal between the country and its private creditors will be concluded soon alongside a second bailout from the eurozone and the International Monetary Fund.

"We still await news from the Greek debt restructuring talks although the few comments that have been made over the last 48 hours have suggested that progress is being made," said Gary Jenkins, managing director at Swordfish Research.

The sense of an easing in Europe's debt woes helped stocks enjoy a stellar start to the year, with many markets recovering a large chunk of their late-2011 losses. Overall, U.S. shares had their best start in 15 years.

The improving backdrop has helped shore up the euro, too, which was trading 0.7 percent higher at $1.3181.

Earlier in Asia, stock markets lacked the same momentum seen in Europe.

Tokyo's Nikkei 225 edged up less than 0.1 percent to close at 8,809.79 but Hong Kong's Hang Seng ended down 0.3 percent to 20,333.37. Mainland China's main index in Shanghai also fell 1.2 percent to 2,268.08.

The improved mood over the global economy helped oil prices track higher — benchmark oil for March delivery gained 59 cents to $99.07 per barrel in electronic trading on the New York Mercantile Exchange.

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Elaine Kurtenbach in Shanghai contributed to this report.

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