Global stocks extend 2-day rally on economy hopes
Thursday, 02 February 2012 | 12:52
Global stocks extended a rally Thursday amid investor optimism that the U.S. economy may grow more than previously expected this year.
Benchmark oil stayed below $98 per barrel while the dollar rose against the euro but fell against the yen.
In early trading in Europe, the FTSE 100 index of leading British shares was steady at 5,789.42 while Germany's DAX was 0.2 percent higher at 6,628.94. The CAC-40 in Paris advanced 0.5 percent at 3,384.05. Wall Street also appeared headed for a higher opening, with Dow Jones industrial futures rising 0.1 percent to 12,671 while S&P 500 futures gained 0.1 percent to 1,321.30.
The gains followed a rally in Asia earlier in the day. Tokyo's Nikkei 225 rose 0.8 percent to 8,876.82 while Hong Kong's Hang Seng shot up 2 percent to 20,739.45 and Seoul's Kospi added 1.3 percent to 1,984.30.
Signs of an improving U.S. economy have helped bolster trader sentiment. Factories raised output in January by the most in seven months, according to the Institute for Supply Management's manufacturing index on Wednesday. And the Commerce Department said construction spending rose 1.5 percent in December, the fifth straight monthly gain.
Investors have also been cheered by growing optimism that contagion from a likely Greek debt default can be contained.
Global equities are advancing "on hopes of the global economy gaining a solid footing and the banking sector continued to rally on the belief that Europe will avoid a catastrophe," IG Markets in Melbourne said in a report.
China's benchmark Shanghai Composite Index climbed 2 percent to 2,312.56 on Thursday amid signs manufacturing improved in January for a second straight month. Australia's S&P/ASX 200 jumped 1 percent to 4,267.80. Benchmarks in Singapore, Taiwan, New Zealand, Thailand and India all gained ground.
"After stepping into a soft patch in the fourth quarter, Asian economic growth is gradually picking up," said Frederic Neumann, co-head of Asian economics at HSBC in Hong Kong. "This rebound is led by the region's giants: China, India, and Japan."
Early Thursday, the Tokyo Stock Exchange suspended trading in 241 securities, including Sony Corp. and Hitachi Ltd., due to a glitch in its electronic trading system. Trading in the suspended securities resumed near midday.
Benchmark oil for March delivery rose 30 cents to $97.91 per barrel Thursday in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to settle at $97.61 on Wednesday.
In currencies, the euro fell to $1.3145 from $1.3158 late Wednesday in New York. The dollar fell to 76.09 yen from 76.20 yen.
Source: Associated Press