London - European shares traded flat on Friday as investors stayed cautious before a US jobs report later in the day that could determine when the Federal Reserve starts scaling back its monetary stimulus.
The FTSEurofirst 300 was virtually unchanged at 1,223.97 points at 09:32 SA time, holding around two-week highs, with
the euro zone's blue-chip Euro STOXX 50 also flat at 2,775.05 points.
The non-farm payrolls report at 14:30 SA time will be scrutinised for clues on whether the US recovery is strong enough to allow the Fed to move to taper asset purchases as soon as this month.
The world's biggest economy is expected to have added 180,000 non-farm jobs last month, keeping the unemployment rate steady at 7.4 percent.
Expectations for a robust number have been mounting in recent days in light of encouraging US economic data, particularly the non-manufacturing ISM.
But analysts say markets are past the phase where robust data is taken as a negative.
“(Stimulus) tapering is maybe not absolutely priced in but it would take something pretty major to change the consensus view that it is coming this month,” Ian Williams, equity strategist at Peel Hunt, said.
“Equities are starting to behave in the conventional fashion responding to stronger economic activity and survey data as a positive for corporate performance... The next challenge for equities is to start to seeing the upward lift to forecasts starting to come through.”
Charles Stanley technical analyst Bill McNamara suggested the Euro STOXX 50 was well supported around current levels, noting its recent pull-back was curtailed by the 50-day moving average, now at 2,746 points.
Further, at the recent low of 2,727 hit on August 30 it had retraced 38.2 percent of the previous advance, “so it is clear that there are buyers when it gets close to 2,700”. - Reuters