World markets rise on improving data, earnings

[July 24, 2009]  BANGKOK (AP) -- World stocks climbed Friday as economic data and company earnings reinforced confidence that a recovery from the global recession is under way.

Nearly all markets in Asia gained and European bourses were stronger in early trading after a jump in U.S. home sales propelled the Dow Jones industrials to its first close above 9,000 since January.

South Korea's benchmark index gained modestly after news that Asia's fourth-largest economy grew at its fastest pace in nearly six years in the second quarter, adding to evidence the region is bouncing back.

Another slew of stronger-than-expected earnings from U.S. companies including Ford Motor Co. added to the case for an economic turnaround.

Tokyo shares were up nearly 2 percent and oil prices added to the big gains made overnight amid signs the U.S. economy, the world's largest, is improving.

But there are still nagging doubts about whether the massive gains in world markets since March can be sustained.

"What is happening in the markets is quite irrational," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "The global economic situation doesn't justify the rise in stock prices. The rally is driven by liquidity and hot money not by fundamentals," he said.

As trading got underway in Europe, benchmarks in Britain, France and Germany were all up nearly 1 percent.

Earlier in Asia, Japan's Nikkei 225 stock average rose 151.61 points, or 1.6 percent, to 9,944.55 and Hong Kong's Hang Seng advanced 165.09, or 0.8 percent, at 19,982.79.

South Korea's Kospi was 0.4 percent higher after figures showed the economy grew 2.3 percent in the second quarter as increased government spending and record low interest rates helped to insulate it from the global recession. Singapore and China have also released stronger growth figures in recent weeks.

In Seoul, shares of Samsung Electronics rose 0.7 percent after the world's biggest maker of memory chips and flat screen TVs reporting a 5.2 percent rise in second quarter profit.

Elsewhere, Australia's market gained 0.6 percent, Singapore was 1.7 percent higher while Taiwan's benchmark edged lower by 0.1 percent.

China's Shanghai market gained 1.3 percent, shrugging off fears that a construction company's massive share sale could weigh on stock prices. China State Construction Engineering Corp., the company that built the "Water Cube" swimming center for the Beijing Olympics, said Friday that it raised $7.3 billion in the world's biggest initial public offering this year.

In the U.S. on Thursday, Wall Street was buoyed by news that existing home sales rose in June for the third straight month and by a higher-than-expected amount.

The Dow Jones Industrials, the stock market's best-known indicator, shot up almost 190 points to 9,069.29, its highest level since November, and all the other big indexes gained more than 2 percent.

Stock futures pointed to more gains Friday on Wall Street. Dow futures were up 37, or 0.4 percent, at 9,028 and S&P futures gained 3.6, or 0.4 percent, to 972.50.

Oil prices hovered above $67 a barrel, adding to big gains made overnight. Benchmark crude for September delivery was up 35 cents to $67.51 a barrel. On Thursday, the contract added $1.76 to settle at $67.16.

In currencies, the dollar fell to 94.98 yen from 95.02. The euro rose to $1.4212 from $1.4157.

[Associated Press; By STEPHEN WRIGHT]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.