* MSCI All Country World Index increased 0.1%
* Mood lifted by increasing activity in Europe
* Trading thin trading with US closed markets
* Concerns remain about China’s crackdown on technology companies
* Dollar is stuck in neutral
* Yields on bonds from the periphery of the Eurozone http://tmsnrt.rs/2ii2Bqr
By Tom Arnold and Kevin Buckland
LONDON / TOKYO, July 5 (Reuters) – World stocks climbed close to record highs on Monday as concerns over the delta variant of COVID-19 offset positive sentiment from rising euro-zone business and a welcome US employment report.
The STOXX index of Europe’s top 600 companies was unchanged, reversing previous losses after data showed that euro-zone companies expanded at the fastest pace in 15 years in June.
The activity of British service companies also increased strongly in June, albeit at a somewhat slower pace. French stocks fell 0.4% as Health Minister Olivier Veran warned France could be heading for a fourth wave of the pandemic due to the highly transferable Delta variant.
COVID-19 fear also weighed on Japanese stocks, with the Nikkei falling 0.6% to a two-week low just a few weeks before the Olympics hosted a surge in infections in Tokyo.
MSCI’s broadest index for Asia Pacific stocks outside of Japan was unchanged.
China’s blue-chip stock index rebounded from previous losses and rose 0.1% higher than Beijing’s pledges to continue political support for its tech sector, concerns over crackdown on ride-hailing giant Didi Global, and scrutiny of others Platform company in the country counteracted.
The MSCI All Country World Index closed last week at a record 724.66 and was up 0.1% on Monday.
Trade was thinner than usual as U.S. markets closed over the long weekend of July 4th.
“Markets in general are still trying to gain a foothold,” said James Athey, investment director of Aberdeen Standard Investments.
“Stocks, of course, continue to shrug or ignore anything that might even remotely be considered negative as they continue their happy and complacent dance towards inevitable reckoning.”
S&P 500 futures signaled a 0.1% decline to open on Tuesday after closing 0.8% higher on Friday to hit a record high. The Dow Jones Industrial Average rose 0.4% and the Nasdaq Composite rose 0.8%, also setting a record.
U.S. non-farm payrolls rose more than an expected 850,000 jobs last month, data from Friday showed. But the unemployment rate unexpectedly rose from 5.8% to 5.9%, while the closely watched average hourly earnings, a measure of wage inflation, rose 0.3% in the past month, lower than the consensus forecast for an increase of 0.4%.
“Goldilocks pressure suggests there is no need to speed up the tapering schedule or the implied rate hike profile,” Tapas Strickland, an analyst with National Australia Bank, wrote in a client note.
“Overall, the workforce is still 6.8 million below pre-February 2020 pandemic levels and still below the level of substantial progress needed by the Fed. So there is nothing in this report about that Fed could become restrictive. “
Eyes are on the minutes of last month’s Federal Reserve Open Market Committee meeting when policymakers surprised the markets by announcing two rate hikes by the end of 2023.
Comments from Fed officials have been more balanced since then, particularly from Chairman Jerome Powell, and investors are analyzing Wednesday’s press release for further clues about the timing of monetary tightening.
Eurozone government bond yields rose, but analysts expect the recent downward trend after US payrolls to resume.
The yield on ten-year German government bonds rose by half a basis point to -0.231%.
The dollar was largely unchanged on Monday after falling from a three-month high late last week under pressure from the weaker details of the US salary report.
The greenback climbed about 0.2% to $ 1.1859 per euro and was unchanged at 111.05 yen.
Gold rose 0.3% to $ 1,792.30 an ounce.
Crude oil was tied to a range as the OPEC + talks dragged on. Saudi Arabia’s Energy Minister pushed back on Sunday against opposition from another UAE Gulf producer to a proposed OPEC + deal, calling for “compromise and rationality” to reach an agreement when the group meets again on Monday.
Brent crude rose 0.1% to $ 76.21 a barrel and US crude rose 0.1% to $ 75.25 a barrel.
(Editing by Sam Holmes and Angus MacSwan)