Global markets mostly higher after US rebound

[April 20, 2010]  LONDON (AP) -- Most global markets edged up modestly Tuesday, following Wall Street higher as financial stocks recovered from a sell-off prompted by the U.S. government's fraud case against Goldman Sachs & Co.

The bank's legal woes, however, could cast a pall on European markets as Britain's financial regulator announced it was launching a full-blown investigation into Goldman Sachs International -- a move that may renew worries of a further expanding of the probe into the investment bank's dealings.

By 11:30 a.m. London time (6:30 a.m. EDT), the FTSE 100 was up 0.78 percent to 5,772.33 while France's CAC 40 climbed 0.84 percent to 4,003.94. Germany's DAX rallied ahead by 1.3 percent to 6,242.58, pulled ahead by strong economic data from Europe's largest economy.

Markets worldwide had retreated after Goldman Sachs was charged last week by the U.S. Securities and Exchange Commission with fraud for its dealings in subprime mortgage securities. Earlier concerns that the investigation would spread to other banks were slightly tempered after Citigroup Inc. on Monday reported surprisingly strong first quarter profit. Goldman is set to report its quarterly results later Tuesday.

The Financial Services Authority's interest in the case is likely to focus on the Royal Bank of Scotland, which paid $841 million to Goldman Sachs in 2007 to unwind its position in a fund acquired in the takeover of Dutch Bank ABN Amro, according to the complaint filed in the United States.

A closely watched survey showed Tuesday that German investor confidence increased in April to 53 points, buoyed by an increase in exports and a steady flow of orders. A day earlier, automaker Daimler AG posted strong preliminary results bolstered by "very solid results" at its core Mercedes-Benz Cars unit.

The gains in Europe followed rebounds in Asia, which saw Hong Kong's Hang Send index climb 1 percent to 21.623.38 and South Korea's Kospi up 0.8 percent at 1,718.03.

John Mar, head of sales trading at Daiwa Capital Markets in Hong Kong, said heavy selling in Asia after the Goldman news may have been overdone.

"What impact does it really have on this part of the world? I view it as an excuse to take profits," Mar said. "The outlook is still fairly positive -- corporate earnings have been good, the economic news is still improving, with the worst behind us in the U.S."

Markets in India, Australia and Taiwan also gained. But bucking the trend, Japan's Nikkei 225 stock average shed 0.1 percent to 10,900.68.

Chinese shares, down nearly 5 percent the day before after government took more action to restrain property prices, fell early in the session before stabilizing to close flat. The main Shanghai index finished virtually unchanged at 2,979.53.

Banking shares rose in Asia, with Japan's Sumitomo Mitsui Financial Group Inc. up 1.1 percent and National Australia Bank ahead by 2.8 percent.

Benchmark crude for May delivery was up $1.12 at $82.57. The contract fell $1.79 on Monday to settle at $81.45.

The dollar rose to 92.82 from 92.47 yen late Monday. The euro climbed to $1.3507 from $1.3488.

Monday in New York, the Dow rose 73.39, or 0.7 percent, to 11,092.05. The Standard & Poor's 500 index rose 5.39, or 0.5 percent, to 1,197.52, while the Nasdaq composite index slipped 1.15, or 0.1 percent, to 2,480.11.

[Associated Press; By TAREK EL-TABLAWY]

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