BEIJING (AP) — Global stock markets rose Wednesday as positive economic data from the United States and Germany offset Asian jitters over the death of North Korean leader Kim Jong Il.
Tokyo’s main index gained 1.5 percent to 8,459.98 points and Seoul jumped 3.1 percent to 1,848.41. Shanghai, Taipei and Singapore also rose. In early European trading, Germany’s Dax rose 0.9 percent to 2,603.73 and France’s CAC 40 gained 0.8 percent to 3,080.5. Britain’s FTSE 100 added 0.8 percent to 5,459.76.
Positive signs from key Western export markets helped shore up sentiment that was jolted by Kim’s death and fears of a possible power struggle in a country pursuing nuclear weapons. Seoul’s main index plunged 5 percent on Monday before recovering.
“We’re being driven by what happened in Europe and the U.S. last night,” said Ric Spooner, chief market analyst for Australia’s CMC Markets. “We got some reasonably good news in the form of the well-bid Spanish bond auction and better-than-expected U.S. housing starts.”
Investors took heart after Spain’s government borrowing costs fell Tuesday in a weekly debt auction. The U.S. Commerce Department reported unexpectedly strong November home starts at their highest level since April 2010 and up 9.3 percent from October.
In Germany, a research group reported business confidence rose unexpectedly this month while consumers were resilient.
Wall Street was set to open higher with Dow futures up 0.6 percent at 12,097 and broader SP 500 futures ahead by 0.5 percent at 1,242.
Kong’s Hang Seng added 1.6 percent to 18,368.6. Singapore’s benchmark added 2.2 percent to 2,673.32 while Sydney’s SP/ASX 200 gained 2.1 percent to 4,137.7. Taiwan’s Taiex soared 4.6 percent to 6,966.48.
China’s benchmark Shanghai Composite Index rose in morning trading but fell to end down 1.1 percent at 2,181.15. Nonferrous metals, financial and real estate stocks weakened.
“Investors were hoping for an easier monetary policy but that hasn’t happened, so worries over the economic outlook mean the correction may persist since there are no positive factors,” said analyst Zhang Jiuhui at Great Wall Securities in Beijing.
China Vanke, the country’s biggest developer, declined 2.7 percent on expectations major cities will maintain curbs imposed on home purchases to restrain price rises. Ping An Insurance Co. of China Ltd lost 5.2 percent after saying it plans to sell up to 26 billion yuan ($4.1 billion) of bonds.
Analysts expect North Korea’s Kim to be succeeded by his third son, Kim Jong Un. State media have stepped up lavish praise of the younger Kim, indicating an effort to strengthen a cult of personality around him similar to that of his father.
Spooner said the strong European and U.S. data were prompting investors to move back into stocks due to concern they might be caught on the sidelines if potential problems in the West fail to materialize and markets rebound.
On Tuesday, major European exchanges all gained after the reports on business and consumer confidence by research institute GfK.
European Union leaders are trying to raise 200 billion euros ($261 billion) to provide the International Monetary Fund with resources to help indebted nations avoid default.
Makets shrugged off news after trading closed Monday that EU finance ministers raised only three-quarters of the target agreed to at a summit last week. At the summit, the 17 countries that use the euro agreed to set up a new treaty to create tighter fiscal rules for the currency union, which has been rocked by a debt crisis for the past two years.
On Wall Street, the Dow Jones Industrial Averages gained 2.3 percent on Tuesday while the SP 500 jumped 2.4 percent.
In currencies, the euro strengthened to $1.312 from $1.3071 late Tuesday. The dollar rose to 77.8 yen from 77.7.
Benchmark oil for February delivery edged up $1.16 to $98.38 per barrel in electronic trading on the New York Mercantile Exchange.
Article source: http://www.nytimes.com/aponline/2011/12/20/business/AP-World-Markets.html?partner=rss&emc=rss