World stocks mostly down; banks lift Japan, Sydney

[February 08, 2011]  BANGKOK (AP) -- World shares were mostly lower Tuesday, battling inertia following a dour manufacturing report out of Germany but with a strong showing by banks that hoisted markets in Australia and Japan.

Oil prices hovered below $88 a barrel as fears ease that protests in Egypt could disrupt Middle East crude supplies. In currencies, the dollar down against the yen and the euro.

European stocks were mostly lower a day after Germany, Europe's largest economy, reported weak manufacturing figures. Britain's FTSE 100 was down 0.1 percent to 6,042.75. Germany's DAX rose 0.1 percent to 7,292.22 and France's CAC-40 dipped 0.2 percent to 4,083.66.

Stocks in New York were set to move higher. Dow futures were up 0.6 percent to 12,161.63 while S&P 500 futures rose 0.1 percent to 1,317.60.

While Germany's government on Monday said factory orders in December fell 3.4 percent -- worse than expected -- deal news out of the U.S. boosted financial stocks on Wall Street and also helped power banking shares in Japan.

The Nikkei 225 rose 0.4 percent to close at 10,635.98, a day after closing at a nine-month high. Financial giants led the way. Mitsubishi UFJ Financial Group added 2 percent, Mizuho Financial Group jumped 3 percent, and Sumitomo Mitsui Financial Group rose 2.3 percent.

Australia's S&P/ASX 200 added 0.5 percent to 4,890.40. National Australia Bank Ltd. rose 1.9 percent after reporting higher quarterly earnings and Westpac Banking Corp. rose 1.1 percent.

Hong Kong's Hang Seng index, meanwhile, slipped 0.3 percent to 23,484.30 and Taiwan's benchmark fell 0.4 percent to 9,111.46. South Korea's Kospi was down 0.6 percent at 2,069.70, with some blue chips losing ground. Samsung Electronics Co. was off 1.1 percent, while Hyundai Motor Co. dropped 2.1 percent.

Shanghai was set to open Wednesday following the Chinese New Year holiday.

Analysts said it was difficult to pinpoint the reason for the muted performance, given the strong session Monday on Wall Street that saw the Dow Jones industrial average rise for the sixth straight day -- its longest winning streak since November. The index climbed 69.48 points, or 0.6 percent, to 12,161.63.

Several big acquisitions buoyed investor optimism as did a strong earnings report from Loews Corp. A bubbly Dow and intense efforts by leaders in Europe to contain the region's debt crisis are also luring investors to developed markets from emerging ones where inflation is a persistent threat.

"We were on a down trend before the Chinese New Year," said Jackson Wong, vice president of Tanrich Securities in Hong Kong. "We are now retreating and pretty much on the down trend."

Expectations that China's central bank will either raise interest rates or hike reserve requirements have been pressuring stocks, he said.

"The investor view is that China's equity markets might not rise this year because of the rising rate environment," Wong said. "The main theme now seems to be that money is leaving emerging markets."

The broader Standard & Poor's 500 index rose 8.18, or 0.6 percent, to 1,319.05. Financial companies posted the largest gain of any of the 10 company groups that make up the S&P index.

The tech-heavy Nasdaq composite gained 14.69, or 0.5 percent, to 2,783.99.

In currencies, the dollar was at 82.04 yen from 82.29 yen late Monday. The euro rose slightly to $1.3642 from $1.3591.

Benchmark crude for March delivery was up 11 cents at $87.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.55 to settle at $87.48 on Monday.

[Associated Press; By PAMELA SAMPSON]

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