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(Sharecast News) - European shares pared gains at midday on Friday after a morning rally that saw the Stoxx 600 hit a fresh intra-day high as a weaker-than-expected US jobs market report reduced the chances of an interest rate hike by the Federal Reserve.
The pan-regional Stoxx 600 index was up 0.13% to 649 at 1212 BST after reaching 651.78 with major markets turning mixed after the release of eurozone services data. US markets are closed for the July 4 Independence Day holiday.
Asia-Pacific markets made gains and reversed losses driven by investor fears over the scale of investment in artificial intelligence.
The US economy added just 57,000 jobs in June, well below the downwardly revised 129,000 recorded in May, according to the Bureau of Labor Statistics. This was well short of forecasts for 110,000, marking the weakest gain in four months. Revisions subtracted 74,000 jobs from the combined April and May totals.
Investors now believe the Federal Reserve will now look at holding off from making any interest rate hikes.
"The market still expects the Fed to hike once this year-with a little more than a 50% chance of that happening as early as September. The US two-year yield is softer but holding above the 4.10% mark, as US crude rebounds slightly from yesterday's dip to $67pb but remains calm near the $70pb level, with no major headlines on the peace negotiations front," said Swissquote analyst Ipek Ozkardeskaya.
"There is more news about increasing oversupply in key markets, and tens of millions of barrels of Iranian oil sailing without a preset destination, than worries about supply shortages."
In regional economic news, private sector activity across the eurozone stabilised in June, according to the final composite purchasing managers' index released on Friday by S&P Global and the Hamburg Commercial Bank (HCOB), with the downturn in the services sector easing more than initially expected.
The eurozone composite PMI, which tracks business conditions across both the services and manufacturing sectors, rose to 50 points last month - marking no change in activity after two months of declines.
This was up from 48.5 in May and the flash estimate of 49.5 released two weeks ago, and with figures below 50 marking a contraction in activity.
Reporting by Frank Prenesti for Sharecast.com