Tuesday, October 25, 2011

World stocks jump as Asian data shows resilience (AP)

BANGKOK ? World stock markets jumped Monday, buoyed by resilient economic indicators from Asia's two biggest economies and hopes of progress in resolving Europe's debt crisis.

Oil prices rose above $88 a barrel. The dollar fell against the euro but rose against the yen.

European shares advanced in early trading. Britain's FTSE 100 gained 0.4 percent to 5,512.34 and Germany's DAX added 0.9 percent to 6,021.92. France's CAC-40 rose 0.5 percent to 3,188.44. Wall Street was headed for another day of gains, with the Dow Jones industrial average 0.3 percent higher at 11,795 and S&P 500 futures gaining 0.3 percent to 1,238.30

Asian shares posted solid gains earlier in the day as economic data from Japan and China showed a measure of strength.

Japan's Nikkei 225 index added 1.9 percent to close at 8,843.98 after the government said exports grew for a second straight month in September. The country's trade suffered a five-month decline in the wake of the March 11 earthquake and tsunami that devastated northeast Japan.

Mainland Chinese shares rose after HSBC said its preliminary China Manufacturing Purchasing Managers Index, which measures industrial production, rose to 51.1 in October from 49.9 in September. A result above 50 indicates expansion but the preliminary indicator is often subject to substantial revision.

The Shanghai Composite Index was 2.3 percent higher at 2,370.33 and the smaller Shenzhen Composite Index climbed 1.9 percent to 977.03.

Hong Kong's Hang Seng soared 4.1 percent to 18,771.82 and South Korea's Kospi shot up 3.3 percent to 1,898.32. Benchmarks in Singapore, Taiwan, Australia, India, Indonesia and the Philippines were also higher.

In Europe, leaders are to meet Wednesday to hammer out a concrete resolution to the region's debt problems, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.

Weeks of intensive discussions by European leaders have so far failed to produce a decisive outcome.

"Markets will remain nervous ahead of Wednesday's EU summit, hoping that officials can settle their differences and emerge with a concrete solution. In this respect, the risk of disappointment is high," Credit Agricole CIB said in a research note.

South Korean constructions shares rose on expectations that the death of Libyan leader Moammar Gadhafi would lead to the resumption of construction projects in the North African country, Yonhap News Agency reported. Daewoo surged 5.5 percent. Hyundai Heavy Industries jumped 7.3 percent.

Chinese banking shares soared ahead of earnings reports to be released this week, analysts said. Hong Kong-listed Agricultural Bank of China jumped 8.5 percent, and Industrial and Commercial Bank of China, the world's largest bank by market value, gained 5.5 percent.

Linus Yip, strategist at First Shanghai Securities in Hong Kong, said speculative investors appeared to be scooping up what were thought to be bargain-priced Hong Kong stocks.

"Today, there is some bargain-hunting for sectors like the Chinese insurance sector and Hong Kong property," he said. Hong Kong-listed Ping An Insurance gained 6.9 percent. China Overseas Land & Investment Ltd. was up 9.3 percent.

In the U.S. on Friday, enthusiasm for stocks was on the upswing amid some positive third-quarter earnings reports from U.S. companies, which come despite a weak economy. Among S&P 500 companies reporting so far, seven out of ten have posted higher profits than expected.

The Dow Jones industrial average jumped 267.01 points, or 2.3 percent, to 11,808.79. The Dow is now up 2 percent from where it started 2011. Before Friday's surge, it was down for the year. The Dow has risen for four weeks straight, the first time that has happened since January.

In currencies, the euro rose to $1.3889 from $1.3864 Friday in New York. The dollar rose to 76.22 yen from 76.12 yen.

Benchmark crude for December delivery was up 96 cents at $88.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to settle at $87.40 in New York on Friday.

Brent crude was up 74 cents at $110.30 a barrel on the ICE Futures Exchange in London.

Source: http://us.rd.yahoo.com/dailynews/rss/japan/*http%3A//news.yahoo.com/s/ap/20111024/ap_on_bi_ge/world_markets

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