Global stock markets drift after rally

LONDON — Equity markets drifted lower on Monday as profit-taking cut short a rally sparked by solid US jobs data and optimism about the prospect of a US-North Korean summit meeting. Dealers said underlying sentiment remained upbeat but many investors, lacking fresh impetus to keep buying stocks, consolidated their positions.

"US stocks are mixed on the heels of last week's sharp rally that came courtesy of Friday's upbeat labour report, thawed geopolitical concerns and eased global trade uneasiness," analysts at the Charles Schwab brokerage said.

The US trend reversal in turn weighed on European stocks which came off their session highs towards the closing bell.

Frankfurt's DAX index, however, outperformed its peers after energy giant E.ON announced plans to take over Innogy, the renewables subsidiary of competitor RWE, in a deal valued at around 20 billion euros.

The deal fuelled a rally of shares in the companies involved, with E.ON shares up by more than 4 per cent in closing trade, and RWE stock just over nine percent higher. 

'Best of both worlds' 

Worldwide, investors were cheered by US Labour Department data that showed employers added a forecast-busting 313,000 jobs in February.

The closely-watched monthly report also revealed moderating wage growth compared with the January report, mitigating concerns the Federal Reserve will speed its pace of interest rate hikes.

"The best of both worlds for equity markets, with the economy in full swing but nary a sign of wage inflation," said Stephen Innes, head of Asia-Pacific trade at OANDA. 

"It doesn't get much better than that for investors and at least for now has dampened the inflationary fears that weighed on investor sentiment in February."