Stock markets rise but sterling hit by vote uncertainty

Stock markets mostly rose on Thursday, while the pound stumbled on growing uncertainty about the outcome of next week's general election in Britain.

Stocks gained across Asia and Europe, while Wall Street pushed higher on data showing a surge in jobs creation with the tech-heavy Nasdaq setting a record high.

The pound tumbled further after a fresh opinion poll pointed to a hung parliament after next Thursday's British general election, though it later recovered.

Sterling had risen in recent weeks on the prospect that Prime Minister Theresa May would win a landslide, giving her a stronger hand in Brexit talks.

But the currency has fallen with the government's poll numbers on fears Britain could end up with a less favourable exit deal.

"If the pound is a barometer of Prime Minister Theresa May's fortunes (then) it's safe to say that the initial glow that currency markets felt in the wake of the April election announcement is starting to wear off," said Michael Hewson, chief market analyst at CMC Markets UK.

The lower value of the pound helped boost the FTSE 100, where many of the listed companies earn much of the revenue abroad and a weak pound helps their reported earnings. It closed 0.3 percent higher, closing back in on record levels.

Tokyo ended 1.1 percent higher as dealers welcomed a survey showing that Japanese firms increased their capital spending in the first quarter, a sign they are growing more confident and suggesting the economy is picking up.

The figures came a day after separate numbers showed that factory output in April climbed at its fastest pace in six years.

"There are good stories and bad stories out there for investors, but the market is largely welcoming the upbeat business investment data," Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told AFP.

However, Shanghai shed 0.5 percent following the release of the private Caixin purchasing managers index of manufacturing, which showed that activity contracted in May for the first time in 11 months. The result disappointed dealers, a day after an official reading pointed to a continued increase, beating forecasts.

"China's manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory," Caixin analyst Zhengsheng Zhong said in a joint statement with data compiler IHS Markit.

The Dow Jones Industrial Average was up 0.1 percent in late morning trading following the release of data showing a strong pickup in US private-sector hiring in May.

Private payrolls firm ADP reported that US companies added 253,000 jobs last month, much above the 180,000 forecast by analysts.

The report raised expectations for Friday's Department of Labor employment report for May. Many analysts say a strong report would help the Federal Reserve decide to raise interest rates at a monetary policy meeting later this month.

The yuan hit its highest levels in seven months on Thursday, leading to talk Beijing was propping up the beleaguered currency following last week's credit rating downgrade by Moody's.

Since this time the yuan has strengthened sharply and was trading Thursday at around 6.7800 per US dollar, a level not seen since early November. Its offshore rate, which is less controlled by Beijing, was 6.7330, its strongest since mid-October.

China said last week that it was considering changing its mechanism for guiding the yuan's value, which was interpreted as a sign Beijing would tighten its grip despite pledges to allow market forces to play a larger role.

- Key figures around 1530 GMT -

London - FTSE 100: UP 0.3 percent at 7,543.77 points (close)

Frankfurt - DAX 30: UP 0.4 percent at 12,664.92 (close)

Paris - CAC 40: UP 0.7 percent at 5,318.67 (close)

EURO STOXX 50: UP 0.4 percent at 3,567.92

New York - Dow: UP 0.1 percent at 21,034.53

Tokyo - Nikkei 225: UP 1.1 percent at 19,860.03 (close)

Hong Kong - Hang Seng: UP 0.6 percent at 25,809.22 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,102.62 (close)

Euro/dollar: DOWN at $1.1218 from $1.1242 at 2100 GMT

Dollar/yen: UP at 111.22 yen from 110.75 yen

Pound/dollar: DOWN at $1.2912 from $1.2892

Oil - West Texas Intermediate: UP 54 cents at $48.86 per barrel

Oil - Brent North Sea: UP 51 cents at $51.27

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