World stocks rise again after Dow hits 2009 high

[November 10, 2009]  LONDON (AP) -- European and Asian stocks rose further Tuesday as expectations of low borrowing costs continued to boost the appeal of equity markets over other investments -- on Monday the Dow Jones industrial average closed at its highest level this year.

In Europe, the FTSE 100 index of leading British shares was up 17.20 points, or 0.3 percent, at 5,252.38 while Germany's DAX rose 19.51 points, or 0.4 percent, to 5,639.23. The CAC-40 in France was 5.47 points, or 0.1 percent, higher at 3,790.86.

Earlier, Japan's Nikkei stock average added 61.74 points, or 0.6 percent, to close at 9,870.73, and Hong Kong's Hang Seng edged up 0.3 percent to 22,268.16.

As in the previous session, investors continued to be buoyed by the weekend pledge from the Group of 20 rich and developing countries to maintain stimulus measures as long as economies remained weak.

"This attitude soothes any lingering fears over activity and should allow for another leg higher in equity markets," said Stuart Bennett, an analyst at Calyon Credit Agricole.

On Monday, U.S. stocks closed around 2 percent higher in the wake of the G-20 statement, with the Dow closing at 10,226.94, its best finish this year.

However, a modest pullback is expected at the open later -- Dow futures were down 18 points, or 0.2 percent, at 10,174 while the broader Standard & Poor's 500 futures fell 2.6 points, or 0.2 percent, to 1,089.10.

Attention this week turns towards the U.S. consumer with many leading retailers, such as Wal-Mart Stores Inc., Abercrombie & Fitch Co., Macy's Inc. and JC Penney Inc. reporting third quarter earnings. Without the help of the consumer, which accounts for around for 70 percent of the U.S. economy, any global economic recovery will be modest.

While the equity rally has found new legs this week, the dollar has suffered. On Monday, the euro rose above $1.50 for the first time this month, with many analysts now predicting a march back to last year's all-time high of $1.6038.

By midmorning London time, the euro was flat around $1.50 but the dollar fell 0.1 percent to 89.87 yen.

The big mover in the currency markets was the pound, which slipped 0.5 percent to $1.6678 after the Fitch ratings agency warned that Britain was the major economy most at risk of losing its triple A debt rating.

"Today's Fitch report is a timely reminder that an economy which has run into trouble with too much debt and too much consumption cannot be pulled out of the crisis by putting in more debt to create even more consumption," said Hans Redeker, an analyst at BNP Paribas.

Elsewhere in Asia, South Korea's markets gained 0.4 percent to 1,582.30. Shares were also higher in mainland China, Australia, Taiwan and the Philippines.

Oil prices drifted below $79, with benchmark crude for December delivery down 47 cents to $78.96. The contract rose $2 on Monday alongside the big stock market gains.

[Associated Press; By PAN PYLAS]

AP Business Writer Yuri Kageyama in Tokyo contributed to this report.

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