GLOBAL MARKETS-Shares shake off China selloff as bond markets brighten

Wall Street and world stocks were mostly higher on Thursday as dovish comments from Federal Reserve officials and a smooth auction of 30-year debt in Japan eased some recent government bond market jitters. Traders on Wall Street and in Europe pushed equities up despite Chinese bourses tumbling overnight on reports that Beijing wanted to cool a red-hot stocks rally, especially the tech sector . The Dow Jones Industrial Average, S&P 500 and Nasdaq all gained between 0.3% and 0.5%, while the FTSEurofirst 300 rose 0.6%, as angst about rising long-term government borrowing costs in the likes of France, Britain and the U.S. eased. Oil prices extended their weak week after a Reuters report that OPEC+ officials are looking at increasing output targets this weekend, while the dollar was drifting ahead of Friday's crucial jobs report. An appetizer came in the shape of higher jobless claim numbers, though traders seemed happy to keep their powder dry.

Several key Federal Reserve officials have bolstered expectations of an imminent U.S. rate cut in recent days. Money markets are now pricing in a near-100% chance that one will be delivered at the Fed's meeting in just under two weeks. "The markets have become a little bit more convinced about a Fed rate cut this month, so that has put some modest downward pressure on bond yields," said MUFG's global markets division head of research, Derek Halpenny.

European bond buyers nudged down the German 30-year bond yield to 3.3%. France's was down a touch more at 4.39%, having hit 4.523% on Tuesday, its highest since June 2009, on worries that its government could collapse again. SALESFORCE SHARES SLUMP One outlier to the pre-payrolls lull was a 6% slump in Salesforce shares after third-quarter revenue disappointed Wall Street's analysts due to lagging monetization of AI-powered products.

While AI euphoria has driven the main U.S. indexes to repeated record highs this year, momentum has ebbed since numbers from Nvidia and others failed to wow investors. Overnight, the main action had been in China following a report that regulators were preparing cooling measures for equity markets. Beijing blue chips fell as much as 2.6%, while the tech-heavy STAR 50 index, which soared nearly 30% last month, dropped more than 6% in its worst day since April. In the U.S., payrolls are not until Friday - keeping investors on edge - but traders watched the nomination hearing of Stephen Miran, U.S. President Donald Trump's pick to replace resigning Fed board member Adriana Kugler. Miran told U.S. senators that no one in the Trump administration has asked him to promise to cut interest rates if he is confirmed as the Fed's newest policymaker. Concerns over Fed independence have done nothing to relieve pressure on major governments' debt prices, so there was relief that an auction of 30-year Japanese bonds had gone smoothly in Tokyo overnight.

Australian shares advanced 1%, recovering from their biggest one-day sell-off since April, while Tokyo's Nikkei 225 ended 1.5% higher. India's benchmark Sensex rose as much as 1% as markets reopened after the government slashed levies on several goods to fire up consumption and counteract U.S. tariffs. Wednesday's Federal Reserve "Beige Book" had painted a mixed picture of the U.S. economy, which appeared to underscore monetary policymakers' concerns. Analysts at ING called it "bleak" and said it was littered with warnings about the inflationary effect of import tariffs on prices. The yield on benchmark 10-year Treasury notes inched down to 4.18% in early U.S. trading with the more rate-sensitive 2-year yield at 3.59%, around its lowest level since the start of May. The dollar edged up 0.4% against the yen to 148.7, keeping within the trading range where it has stayed since the beginning of August. It was also fractionally higher against the euro at $1.1634. In commodities markets, Brent crude dipped another 0.7% to around $67 a barrel and gold edged back 0.2% after hitting a record high of $3,578.5 an ounce on Wednesday.

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