World markets up on U.S. economic news

World stock markets rose Wednesday amid mounting optimism about the speed of the U.S. economic recovery ahead of further data later.
DEC 23, 2009
World stock markets rose Wednesday amid mounting optimism about the speed of the U.S. economic recovery ahead of further data later. In Europe, the FTSE 100 index of leading British shares was up 43.12 points, or 0.8 percent, at 5,371.78 while Germany's DAX rose 34.36 points, or 0.6 percent, to 5,980.05. The CAC-40 in France was 28.43 points, or 0.7 percent, higher at 3,926.81. Earlier, all major Asian markets rose strongly in the wake of Tuesday's advance on Wall Street after existing home sales figures for November came in much stronger than anticipated. Wall Street was poised to open higher again later — though much could hinge on the last batch of data before Christmas. Dow futures were up 31 points, or 0.3 percent, at 10,439 while the broader Standard & Poor's 500 futures rose 4.9 points, or 0.4 percent, to 1,118.50. The focus later will be on government personal spending and new homes sales figures, as well as the University of Michigan's latest insight into the state of consumer confidence. "Personal spending data should echo the already strong numbers on retail sales, while personal incomes are also set to rise," said Daragh Maher, an analyst at Calyon Credit Agricole. "New home sales may not match the scale of the leap in existing home sales, but they should still be higher, and the market is also flirting with the idea of an upward revision to consumer confidence," he added. Contrary to many expectations, stocks around the world have rallied this week — many analysts were anticipating a modest pullback as investors shut up shop for the year by booking profits accumulated during the nine-month bull market. Earlier, China's benchmark Shanghai Composite Index rose 23.26 points, or 0.8 percent, to 3,073.78, while Sydney's S&P/ASX added 0.8 percent to 4,739.30 amid strength in coal stocks. Hong Kong's Hang Seng reversed losses to climb 236.70, or 1.1 percent, to 21,328.74. Seoul's Kospi gained 0.4 percent to 1,661.35, while Singapore was up 0.6 percent and Taiwan's Taiex rose 0.6 percent. Tokyo was closed for a holiday. Oil prices rose modestly with the benchmark January contract up 36 cents to $74.76 in electronic trading on the New York Mercantile Exchange. There was little activity in the currency markets — the dollar was flat at 91.82 yen, while the euro was unchanged at $1.4244. Over the last couple of weeks, the dollar has bounced back from 15-month lows against the euro and 14-year yen lows amid mounting expectations that the U.S. Federal Reserve will start withdrawing its extraordinary liquidity measures and raising interest rates sooner than expected. The euro has been dogged by concerns over the economic situation in a number of European countries. The pound was also steady just below $1.60 after the minutes to the last rate-setting meeting of the Bank of England indicated that monetary policy in Britain will be left as is at least for a couple of months. All nine members of the Monetary Policy Committee voted to keep the Bank's financial asset purchases at 200 billion pounds ($320 billion) and the benchmark interest rate unchanged at the record low of 0.5 percent. "While it seems likely that the MPC is nearing the end of its measures to support the economy, further action is certainly possible if the recovery disappoints," said Jonathan Loynes, chief European economist at Capital Economics. "Either way, any tightening of policy remains a long way off."

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