LONDON, Jan 3: War worries and supply concerns kept oil prices on the boil on Friday but most other financial markets took a breather after an unexpectedly hectic start to the year.

European shares were mixed and government bond prices recovered slightly having previously digested surprising news on Thursday of surging US manufacturing data that churned across markets looking for signs of a US recovery.

The dollar traded in a tight range with other major currencies.

This early in the year we’re still locked into the macro theme and whether the (US) economy will double dip or not, and I don’t think it will, said Nomura global strategist Anais Faraj, reflecting widespread caution.

Oil prices, however, continued their recent gains, pushed higher by an export-crippling strike in Venezuela that has exacerbated underlying concern about the effect of US-led war in Iraq.

European stocks, meanwhile, put in a mixed performance. The FTSE Eurotop 300 was up about 0.3 per cent while the narrower DJ Euro Stoxx 50 index eased 0.1 per cent.

The Japanese market was closed, but other Asian bourses ended with gains on the back of the US economic data.

In New York overnight, the Dow Jones industrial average closed up 3.2 per cent and the tech-laced Nasdaq Composite ended 3.7 per cent higher, boosted by the data that fanned hopes the ailing economy is recovering.

Euro zone government bond yields eased as investors bought bonds after sharp falls in prices the previous session.

Yesterday’s sell-off was probably a bit overdone as it was sparked by only one set of data and the overall picture remains bond-friendly, said a trader in Frankfurt.

On the foreign exchange market, the dollar paused after staging its biggest one-day rally since August.

However, with the Iraq issue still unresolved investors were reluctant to extend the dollar’s rally much further, leaving the greenback little changed from Thursday’s New York close.—Reuters