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World stocks rise as Greece debt deal appears near

Wednesday, 08 February 2012 | 13:06
World stocks rose Wednesday as Japan's powerhouse exporters got a boost from hopes of new moves to weaken the yen while a deal appeared within reach between Greece and its creditors to cut the country's massive debt load.
Benchmark oil rose above $99 per barrel. The dollar fell against the euro but was higher against the yen.
European shares opened higher, following a rally in Asia. Britain's FTSE 100 gained 0.4 percent to 5,911.84 while Germany's DAX added 0.9 percent to 6,816.39. France's CAC-40 rose 0.4 percent to 3,425.06.
In New York, stocks were set to rise ahead of the opening bell, with Dow Jones industrial futures gaining 0.3 percent to 12,866 while S&P 500 futures added 0.2 percent to 1,347.70.
Earlier in the day, Asian stocks posted sharp gains following a retreat of the yen that was welcomed by Japan's mighty export sector. The Nikkei 225 index in Tokyo gained 1.1 percent to close at 9,015.59, its highest finish since Oct. 28.
South Korea's Kospi rose 1.1 percent to 2,003.73 and Hong Kong's Hang Seng surged 1.5 percent to 21,018.46. Australia's S&P/ASX 200 added 0.4 percent to 4,290.70.
Benchmarks in Singapore, Taiwan, Indonesia, New Zealand and India also rose. Mainland China's Shanghai Composite Index jumped 2.4 percent to 2,347.53 and the smaller Shenzhen Composite Index gained 2.8 percent to 893.82.
Greece has been kept solvent for the last two years by euro110 billion ($145 billion) in international rescue loans. But the money was not enough and a second loan is urgently needed to avert bankruptcy.
International lenders, however, have refused to approve more aid unless Greece learns to live within its means and implements a strict austerity program. Without an injection of emergency money _ some euro130 billion ($170 billion) is on the line _ Greece will likely default on bond repayments due next month.
"People are hopeful there will be some resolution on Greece. Nothing dramatic is happening, but generally people are more confident that we will get a resolution on Greece and they will remain in the euro in the short-term," said Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong.
Meanwhile, Toyota Motor Corp. jumped 5 percent, a day after Japan's top automaker raised its annual earnings forecast, saying a recovery is on track. A weaker yen helped other export-dependent stocks. Yamaha Motor Co. surged 5.2 percent and Mazda Motor Corp. soared 7.3 percent. Panasonic Corp. added 3.3 percent.
Earnings of many Japanese brand name companies have been battered in recent months by the yen's strength against the dollar and the euro, which erodes foreign income when repatriated to Japan.
But the yen fell Wednesday, a day after Japan's Finance Ministry released data showing that the country had conducted unannounced yen-selling interventions in early November, Kyodo News reported. Still, the yen remains significantly stronger than it was a year ago.
BHP Billiton Ltd., the world's biggest miner, shed 0.4 percent after announcing a 5.5 percent drop in first-half profit. The Anglo-Australian company blamed the results on lower commodity prices as well as production constraints.
Australian mining companies' burgeoning profits have prompted the government to introduce a new tax on iron ore and coal revenue starting in July.
Benchmark oil for March delivery was up 95 cents to $99.37 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.50 to $98.41 per barrel on the Nymex on Tuesday.
In currency trading, the euro rose to $1.3268 from $1.3248 late Tuesday in New York. The dollar rose to 77.06 yen from 76.78 yen.
Source: Associated Press




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