World markets gain on US economic data

[March 26, 2009]  HONG KONG (AP) -- World stock markets gained Thursday, building on this month's rally as better-than-forecast economic data in the U.S. buoyed hopes that government stimulus measures are starting to heal the global economy.

Every major market across Asia advanced as investors took relief in figures showing orders at U.S. factories for cars, household appliances and other durable goods climbed 3.4 percent last month. Also, new home sales rose 4.7 percent in February. The figures -- better than the market's expectations -- lifted optimism that demand in the world's largest economy might bottom out in the coming months.

That's critical for export-driven Asian countries like Japan, South Korea and Taiwan whose economies are getting hammered as American companies and consumers cut back their spending amid the country's worst recession in decades.

"These are some of the first signs that we might be seeing a recovery. The hope is that the U.S. economy might be bottoming out," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "People are just encouraged the economy hasn't completely dived yet."

In Europe, Britain's FTSE 100 rose 0.2 percent to 3,908.98, Germany's DAX rose 0.6 percent to 4,248.76, and France's CAC-40 edged up 1 point to 2,894.21.

Hong Kong's market led Asia higher, with the Hang Seng vaulting 486.87 points, or 3.6 percent, to 14,108.98. Japan's Nikkei 225 stock average rose 156.34 points, or 1.8 percent, to 8,636.33, and South Korea's Kospi climbed 1.2 percent to 1,243.80.

Elsewhere, Shanghai's index jumped 3.1 percent, Australia's benchmark added 1 percent and Singapore's key stock measure advanced 4 percent. India's Sensex rose 3.5 percent to 10,003.10.

The U.S. economic reports lifted exporters in Asia, with Sony Corp. jumping 6.8 percent and Nikon Corp. gaining 4 percent in Tokyo.

Chinese financials also posted huge gains after Goldman Sachs said it wouldn't sell the bulk of its stake in top lender Industrial & Commercial Bank of China Ltd. until next year at the earliest. ICBC soared 14.8 percent in Hong Kong, while China Construction Bank climbed 7.8 percent. Bank of China added 7.9 percent.

Upbeats assessments from U.S. banks, combined with government financial bailouts and better-than-expected data, have elevated investors hopes of a turnaround and led markets worldwide dramatically higher this month.

Benchmarks in Japan and Hong Kong, down sharply just weeks ago, are now almost flat for the year. South Korea's Kospi has added more than 10 percent for the year.

"The stock market in the past two weeks has also gone up a lot," Hong Kong billionaire Li Ka-shing, one of Asia's richest men, told reporters in Hong Kong as his companies, Cheung Kong and Hutchison Whampoa, announced earnings. "If the U.S. economy can get a foothold, the whole world will respond positively."

Cheung Kong, Li's flagship developer, gained 1.9 percent despite reporting a drop in full-year profit. Hutchison Whampoa added 3.3 percent on better-than-expected earnings.

Asian investors found further encouragement after Wall Street ended an erratic session higher to extend its strong gains this month. The Dow Jones industrial average rose 89.94, or 1.17 percent, at 7,749.81, while the Standard & Poor's 500 index rose 7.63, or 0.95 percent, to 813.88

U.S. stock index futures pointed to more gains Thursday in the U.S., with Dow futures up 50 points, or 0.7 percent, to 7,730, and S&P 500 futures up 10 points, or 1.2 percent, to 818.2.

Oil prices rose in Asian trade, with crude for May delivery up 58 cents at $53.35 a barrel.

In currencies, the dollar strengthened to 98.11 yen from 97.63 yen late Wednesday, while the euro weakened to $1.3559 from $1.3588.

[Associated Press; By JEREMIAH MARQUEZ]

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