Stocks get some relief from worries about Greece

[May 26, 2011]  LONDON (AP) -- Global stock markets mostly rose Thursday ahead of U.S. economic growth figures and as worries over the debt crisis sweeping Greece eased somewhat following indications that the debt-stressed country may get a second bailout.

The consensus in the markets is that the 1.8 percent annualized rate of growth recorded last month will be revised modestly higher to 2 percent, largely on the back of stronger than anticipated recent retails sales data.

"Expectations are for the figure to be upwardly revised, which would certainly help to quell some of the negative sentiment that has been dogging the markets this week," said Ben Critchley, sales trader at IG Index.

If the growth data disappoint, then it may reinforce concerns about the U.S. economic recovery.

That's been one of the two main factors behind the poor performance of stocks over the past few weeks, the other relating to concerns over Europe's debt crisis, in particular whether Greece will end up having to restructure its mountain of debts.

Some of those worries were eased Thursday by comments from Germany's finance minister Wolfgang Schaeuble that Greece may need more time to get its house in order -- an indication that Greece will get the next tranche of its rescue loans and possibly a second bailout.

"Those comments suggest greater consensus toward a fresh loan to keep Greece funded through to 2013," said Derek Halpenny, an analyst at The Bank of Tokyo-Mitsibushi UFJ.

Halpenny said the markets will be looking at the summit of G-8 leaders in Deauville, France for any further comments, if any.

The euro has dropped over the past couple of weeks as debt crisis fears ratcheted higher. However, it garnered some support Thursday from a report in the Financial Times that China, among others in Asia, is interested in buying up bonds from Portugal, the eurozone's third bailout victim.

By late morning London time, the euro was 0.6 percent higher on the day at $1.4171.

European stocks were faring less well, with Germany's DAX down 0.3 percent to 7,151. The CAC-40 in France was 0.1 percent higher at 3,934 while the FTSE 100 index of leading British shares rose 0.4 percent to 5,896.

Wall Street was also poised for a lackluster opening, though the actual performance could hinge on the growth figures as well as the weekly jobless claims data. Dow futures were up 0.2 percent at 12,380 while the broader Standard & Poor's 500 futures rose a similar rate to 1,319.

Earlier in Asia, stocks enjoyed a strong day, with Japan's Nikkei 225 stock average boosted by the news that camera maker Canon was to spend as much as 50 billion yen ($183 million) buying back up to 1.2 percent of its shares.

The Nikkei closed 1.5 percent higher at 9,562.05, with Canon up 5.8 percent.

South Korea's Kospi leaped 2.8 percent to end at 2,091.91 while Australia's S&P/ASX 200 rose 1.6 percent to finish at 4,660.20.

Hong Kong's Hang Seng ended 0.7 percent higher at 22,900.79 but mainland Chinese shares slid amid concerns that growth may slow in the latter half of the year. Shanghai's Composite Index dipped 0.2 percent to close at 2,736.53 while the smaller Shenzhen Composite Index lost 1 percent to end at 1,123.15.

Meanwhile, oil prices continued to hover round the $100 a barrel mark. Benchmark crude for July delivery was down 44 cents to $100.88 in electronic trading on the New York Mercantile Exchange on Thursday.

[Associated Press; By PAN PYLAS]

Kelvin Chan in Hong Kong contributed to this report.

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