World stocks rise amid signs of US job growth

World stock markets rise amid signs that US job market is picking up

Associated Press

BANGKOK (AP) -- World stocks rose Tuesday, assisted by an absence of bad financial news and signs that the U.S. economy may be strengthening.

Benchmark oil hit $102 per barrel while the dollar fell against the euro and the yen.

Stock markets were higher in early European trading, tracking gains in Asia. Britain's FTSE 100 rose 0.9 percent to 5,662.63. Germany's DAX jumped 1.4 percent to 6,100.30 and France's CAC-40 rose 1.6 percent at 3,177.48.

Ahead of the opening bell, Wall Street appeared set for a higher opening. Dow Jones industrial futures rose 0.5 percent to 12,402 and S&P 500 futures gained 0.6 percent to 1,283.10.

Japan's Nikkei 225 index, reopening after a three-day holiday weekend, added 0.4 percent to close at 8,422.26. Hong Kong's Hang Seng index rose 0.7 percent to 19,004.28 while South Korea's Kospi jumped 1.5 percent to 1,853.22. Australia's S&P ASX 200 rose 1.1 percent at 4,152.20. Benchmarks in Singapore, Taiwan, and Indonesia also posted gains.

Improving economic data out of the U.S. was one key factor working in favor of markets, said Cameron Peacock of IG Markets in Melbourne. The U.S. added 200,000 jobs in December in a burst of hiring that drove the unemployment rate down two notches to 8.5 percent, its lowest in almost three years. That led economists to conclude that the improvement in the job market might just last.

"With all the problems of the last few years, and the emergence of China as a legitimate economic superpower, it should not be forgotten that the US is still the world's largest and most influential economy," Peacock said in a report.

Energy-related shares rose as oil prices firmed up. South Korean refinery S-Oil Corp. gained 2.3 percent, while Japanese energy explorer Inpex Corp. gained 2.7 percent. Hong Kong-listed China Petroleum & Chemical Corp. added 1.4 percent.

Heavy machinery shares also rose. South Korean power equipment maker Doosan Heavy Industries & Construction gained 4.1 percent and Hyundai Heavy Industries Co. rose 4 percent. Japan's Hitachi Construction Machinery Co. rose 1.9 percent.

Olympus Corp. soared 19.9 percent, following a report Monday in The Nikkei financial daily that the scandal-hit company will likely remain listed on the Tokyo Stock Exchange.

The company, which has acknowledged using fraudulent methods to hide staggering investment losses dating back to the 1990s, had been threatened with delisting. The stock is still trading at about half its value prior to the scandal.

Japanese exporters, meanwhile, continued to feel the pinch of a strong yen, which lowers the value of expatriated profits and makes Japanese products more expensive overseas.

Mazda Motor Corp. fell 2.2 percent, Canon Inc. dropped 1.5 percent and Nikon Corp. slid 1 percent.

Stocks advanced in mainland China, as investors continued to cheer Premier Wen Jiabao's promise last weekend to channel lending to entrepreneurs who have been battered by weak global demand. The benchmark Shanghai Composite Index gained 2.7 percent to 2,285.74, the highest closing in almost one month. The smaller Shenzhen Composite Index gained 3.9 percent to 880.86.

"The market continued to rise mainly due to inspiration from Wen Jiabao during the National Financial Work Conference in Beijing last Saturday," said Yang Yining, an analyst at Capital-edge Investment& Management Co. Ltd. in Shanghai.

"There is some room for gains in the short-term due to earlier losses. The long term will depend more on the economic outlook and corrections in the real estate industry," Yang added.

Still, trade figures for the world's No. 2 economy weakened in December. Growth in imports fell to 11.8 percent, barely above half the previous month's 22.1 percent gain. Exports rose 13.4 percent, down slightly from November's growth rate.

Benchmark crude for February delivery rose $1.14 to $102.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $101.31 in New York on Monday.

In currency trading, the euro rose to $1.2769 from $1.2762 late Monday in New York. The dollar fell to 76.85 yen from 76.89 yen.

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AP research Fu Ting contributed from Shanghai.

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