By Jeremy Gaunt, European Investment Correspondent
LONDON, March 5 (Reuters) - Financial market focus shifted
to the U.S. economy's key services sector on Wednesday as
European investors took stocks higher after five days of losses
and oil clambered above $100 a barrel again.
The dollar gained against major world currencies ahead of
the Institute of Supply Management's index of service sector
activity due later in the day.
The ISM's non-manufacturing index is see rising above its
record low in January but still staying within territory that
suggests economic contraction rather than expansion.
A second month of shrinkage in the index would lend
considerable support to analysts who say the United States is
already in recession.
The report is also expected to consolidate investor views
about U.S. jobs data to be released on Friday, a major indicator
of likely interest rate moves.
"The Fed has signalled that it is very much in 'data watch
mode' so expectations are swinging round potentially on the back
of the numbers that come between now and their next meeting (on
March 18)," said Adam Cole, global head of FX currency strategy
at RBC Capital Markets.
Equity markets were mixed with Europe rising and Asia
generally lower.
European shares gained in early trade, partly on the back of
a report that bond insurer Ambac Financial Group <ABK.N> was
moving closer to a bail out, helping shares bounce back after
five consecutive days of losses.
The FTSEurofirst300 index <> was up 0.7 percent.
Earlier, Japanese stocks ended slightly lower at a six-week
closing low.
"Investors know shares are cheap but cannot bring themselves
to actually buy them," said Naoteru Teraoka, general manager of
investment management division at Chuo Mitsui Asset Management.
The benchmark Nikkei average <> ended down 0.2 percent
or 20.22 points at 12,972.06, the lowest close since Jan 23. The
broader TOPIX index <> was down 0.1 percent at 1,263.91.
OIL SPIKES, DOLLAR FIRMS
Oil prices moved above $100 after an almost 3 percent tumble
a day earlier, as growing signs that OPEC would not raise output
at its latest meeting balanced expectations of bearish U.S. oil
stocks data.
U.S. light crude for April <CLc1> was up 78 cents at $100.31
a barrel, still below Monday's record high of $103.95.
"The market, not only oil but all commodities, will remain
supported," said Ken Hasegawa, manager of commodities
derivatives at broker Newedge in Tokyo.
The dollar gained ground against the euro and a basket of
major rival currencies but was still close to record lows ahead
of the U.S. data.
Against a basket of six major currencies, the dollar was up
around a quarter of a percent at 73.844 <.DXY>, while the euro
was down 0.3 percent at $1.5168 -- still fairly close to this
week's record $1.5275 <EUR=>.
The dollar was up 0.4 percent versus the yen at 103.70 yen
<JPY=>.
The dollar has fallen roughly 5 percent against the yen in
the past week while the euro has climbed around 3.5 percent
versus the U.S. currency.
Euro zone government bond yields were flat to lower. The
benchmark 10-year bond yield <EU10YT=RR> was up 4 basis points
at 3.854 percent.
(Editing by Mike Peacock)
