World stocks rise amid hopes downturn is bottoming

[February 04, 2009]  HONG KONG (AP) -- Asian stocks advanced Wednesday, with Tokyo's index up nearly 3 percent, as better-than-expected news about the U.S. and Chinese economies raised hopes the global downturn was nearing a bottom. European markets opened modestly higher.

The upward swing followed Wall Street, where investors breathed a little easier after a surprise jump in home sales in December suggested the battered housing market might soon stabilize.

Asian investors also were heartened by Wednesday's report pointing to possible recovery in Chinese manufacturing. While manufacturing shrank again in January, the contraction was less severe than in recent months and seen by some as a sign China's stimulus measures might be taking hold.

But with the global economy and company results still in dire shape, the move higher was likely to be temporary, analysts cautioned. Amid the hopeful signs came more gloom Wednesday from corporate bellwethers such as Australian mining giant BHP Billiton Ltd. and Japanese electronics maker Panasonic Corp.

"It's a fictitious rebound. The figures are better than we thought, but they're still bad," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "It's encouraging of course, but it's far too early to say we're seeing a revival in the global economy."

Japan's Nikkei 225 stock average rose 213.43 points, or 2.7 percent, to 8,038.94, while Hong Kong's Hang Seng Index added 287, or 2.3 percent, to 13,063.89. South Korea's Kospi was up 2.8 percent at 1,195.37.

In Shanghai, the main index gained 2.3 percent to 2,107.75 as traders welcomed news the purchasing managers index, a key gauge of manufacturing activity, rose to a four-month high of 45.3 percent on a 100-point scale. That was up from November's low of 38.8.

Elsewhere, markets in Singapore, India and Taiwan also advanced.

As trading started in Europe, Britain's FTSE 100 added 0.7 percent, Germany's DAX was up 0.4 percent and France's CAC 40 was 0.9 percent higher. U.S. stock futures rose modestly. Dow futures were up 24, or 0.3 percent, at 8,010 and S&P500 futures gained 2.8, or 0.3 percent, to 834.30.

In Tokyo, exporters raced ahead on optimism that the worst may be over for the U.S. economy, a vast market for their products. Toyota Motor Corp., the world's top automaker, jumped 4.5 percent and Honda Motor Co. rallied 6.3 percent.

South Korean carmakers also surged, helped by overnight data showing Hyundai Motor Co. posted a 14 percent increase in U.S. sales in January, one of the few companies to eke out gains in a dreadful auto market. Hyundai shares vaulted 7.6 percent.

Among tech shares Panasonic, the world's largest maker of plasma display TVs, rose 1 percent in Tokyo despite tumbling to a loss of 63.1 billion yen ($709 million) for the fiscal third quarter. The company also announced it would slash 15,000 jobs and shut down 27 plants worldwide.

In Australia, mining heavyweight BHP closed little changed after reporting a 57 percent drop in first-half profit. The company, hit hard as the global slowdown dragged down prices and undercut demand, warned of more weakness in commodity markets.

Overnight in New York, the Dow Jones industrial average rose 141.53, or 1.8 percent, to 8,078.36, galvanized by figures showing a key index of pending sales for preowned homes rose 6.3 percent in December from the previous month.

Any sign the U.S. housing industry slide is slowing is likely to help sentiment, as many analysts argue the recession in the world's largest economy won't end without some improvement in home prices.

Broader stock indicators also rose. The Standard & Poor's 500 index climbed 13.07, or 1.6 percent, to 838.51, and the Nasdaq composite index rose 21.87, or 1.5 percent, to 1,516.30.

In oil, crude prices were slightly lower in Asia trade, with light, sweet crude for March delivery down 13 cents to $40.63 a barrel in electronic trading on the New York Mercantile Exchange. The contract overnight rose 70 cents to settle at $40.78.

In currencies, the dollar weakened to 89.12 yen, down from 89.39. The euro traded lower at $1.2931 compared to $1.3014.

[Associated Press; By JEREMIAH MARQUEZ]

Associated Press writer Shino Yuasa in Tokyo contributed to this story.

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