By Stella Qiu

SYDNEY (Reuters) -China shares staggered toward their largest weekly drop in five years on Friday even as late-session talk of state support stabilised losses, while blowout earnings at Amazon and Meta buoyed U.S. futures ahead of crucial labour-market data.

The was last down 1% and with losses over 5.6% for the week is headed for its biggest fall since late 2018. The blue-chip CSI 300 was down 0.5%, having recovered in late trade from five-year lows. [.SS]

Elsewhere, quarterly results from Meta Platforms (NASDAQ:) and Amazon.com (NASDAQ:) impressed investors, with their shares surging 15% and 7% in after-hour trading, respectively, adding a combined $280 billion in stock market value. Apple (NASDAQ:), however, fell 3% after the close on disappointing China sales.

The rally is set to spill over to European markets, with EUROSTOXX 50 futures up 0.8%. extended gains to be up 1% while rose 0.6%.

rose 0.4% and Hong Kong's was steady thanks to late gains.

The tech rally has helped wash over the flurry of worry around U.S. regional banks, although that part of the market remains under pressure. The KBW Regional Banking index fell 2%, following its 6% slide the day before.

Concerns about the health of regional lenders resurfaced after (NYSE:) reported increased stress in its commercial real estate portfolio.

"It does provide another bit of a headwind for sentiment within the equity market. But for the Fed, I think that at this stage it's not yet a concern that will tilt them or force them into some policy action," said Rodrigo Catril, senior FX strategist at National Australia Bank (OTC:).

For now, investors are mostly waiting for U.S. payrolls data on Friday. Economists expect the U.S. economy added 180,000 new jobs in January, while the jobless rate ticked up to 3.8% from 3.7%.

That would come after a surprise jump in jobless claims and a weak private payrolls report.

"If you look at the distributions of the survey, it actually has a significantly wide distribution, so there's a greater degree of uncertainty in terms of the outcome," said Catril from NAB.

"Although yesterday Fed Chair Powell didn't think a March rate cut was likely, ultimately...the data will determine the case for when the Fed should start easing."

A downside miss in payrolls could bring a March rate cut back into play. Markets still see a chance of a March move at about 40%, while the probability for a May move stood at 32 basis points - implying a 100% probability of 25 basis points and some chance of a 50 basis-point easing.

Reflecting the still sizeable cuts to come this year - about 145 basis points priced in - and renewed jitters over regional U.S. banks adding to safe-haven demand, longer-term Treasuries are headed for the best week since mid December.

Ten-year treasury yields rose 2 basis points to 3.887%, but were still down a whopping 27 basis points for the week. The rate sensitive two-years were also up 2 bps at 4.2186%, but down 15 bps on the week.

The slide in yields pressured the U.S. dollar, which fell 0.5% overnight against its peers and on Friday stuck to the low end of its recent range at 103.03.

The euro was buoyant at $1.0877, having lifted 0.5% overnight after data showed underlying price pressures in the euro zone were still strong. The sterling perched at $1.2745, having rallied 0.5% overnight after the Bank of England said it would tread carefully about rate cuts.

In energy markets, oil prices recouped some losses from the previous day following a decision by OPEC+ to keep its oil output policy unchanged, though they are still headed for weekly losses. [O/R]

futures rose 0.6% to $79.15 a barrel, after falling more than 2% the previous day, and U.S. West Texas Intermediate crude gained 0.5% to $74.2 a barrel.

Safe-haven gold was flat at $2,055.20.