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Markets start strong following US jobs relief

LONDON/HONG KONG--Stocks drifted lower Friday after big gains the day, when U.S. jobs figures came in stronger than expected, and as investors awaited earnings from major banks, starting with JPMorgan Chase & Co.

A sharp fall in U.S. jobless claims last week to 339,000 shored up markets on Thursday and helped investors look past another downgrade of Spain's debt.

The attention will remain on the U.S. on Friday, with JPMorgan and Wells Fargo Bank poised to kick off the earnings season for the banks. Overall, earnings results have so far been lackluster.

“On the upside, poor third quarter earnings have been priced into the markets now so unless we see a dramatic reduction in profits we shouldn't see too major an impact,” said James Hughes, chief market analyst at Alpari. “On the other hand we're unlikely to see too much of a rally either because investors will be cautious as they wait to see just how bad earnings are.”

As a result, trading Friday was subdued.

In Europe, the FTSE 100 index of leading British shares was down 0.3 percent at 5,815 while Germany's DAX fell 0.4 percent to 7,251. The CAC-40 in France was 0.4-percent lower at 3,400.

Wall Street was poised for a steady open, with both Dow futures and the broader S&P 500 futures up 0.1 percent. However, the picture could change as the earnings statements are due for release before the market opening bell.

Earlier in Asia, markets were mixed by the close.

Japanese shares were hit by a plunge in telecom giant Softbank after it emerged it is eyeing a near US$13 billion deal to buy Sprint Nextel of the United States, in what would be one of Japan's biggest ever overseas deals.

Tokyo closed 0.15 percent, or 12.66 points, lower at 8,534.12.

Hong Kong's Hang Seng advanced 0.7 percent to 21,136.43 and

Shanghai gained 0.10 percent, or 2.06 points, to close at 2,104.94. Australia's S&P/ASX 200 added slightly less than 0.1 percent to 4,486.60. South Korea's Kospi was flat at 1,933.26.

Eyes are now on China, which will release on Saturday its trade figures for September, with investors hoping for an improvement on recent months that have revealed tumbling exports and imports as the demand in key markets dries up.

Beijing will on Monday release inflation data, followed by crucial gross domestic product figures.

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