World stocks advance as oil prices rise

[May 13, 2011]  BANGKOK (AP) -- Modest gains on Wall Street, stabilizing oil prices and improving economic data from France helped lift world markets higher Friday.

Oil prices rose to near $100 a barrel as the U.S. dollar weakened, making commodities such as crude less expensive for investors with other currencies.

Shares in Europe turned higher as France reported its economic growth accelerated in the first quarter thanks to higher consumer spending and corporate investment. Britain's FTSE 100 rose 0.8 percent to 5,989.78 and Germany's DAX added 0.8 percent to 7,500.77. France's CAC-40 rose 0.9 percent to 4,059.29.

Wall Street was also poised to go higher, with Dow Jones industrial futures up 24 points to 12,696 and S&P 500 futures nearly three points higher to 1,350.40.

Trading in Asia was lackluster, however. Japan's Nikkei 225 slipped 0.7 percent to close at 9,648.77 as the country's currency posted midday gains against the dollar before dropping, posing yet another concern to earthquake-embattled exporters. Toshiba Corp. lost 2 percent, while Sony Corp. and Hitachi Ltd. both lost 1 percent.

Elpida Memory Inc., a major maker of microchips, tumbled 3.6 percent a day after reports said the company's net profit plummeted 32 percent in fiscal 2010.

Nissan Motor Co. was up 3.5 percent after announcing it had returned to profit in the fourth quarter, although uncertainties remain due to the damage from the mammoth March 11 earthquake and tsunami that have disrupted production for Japanese automakers.

Hong Kong's Hang Seng reversed course and closed with a 0.9 percent gain to 23,276.27. Energy companies enjoyed a boost as oil prices began to rise. PetroChina Co. Ltd., the publicly traded unit of China's biggest oil and gas company, rose 0.4 percent after slipping earlier in the day.

Australia's S&P/ASX 200 gained 0.3 percent to 4,711.40, while South Korea's Kospi lost 0.1 percent to 2,120.08. Benchmarks in Taiwan, New Zealand and the Philippines were also lower.

"There's really no good news out there that is a catalyst for buying," said Tom Kaan, head of equity sales for Louis Capital Markets in Hong Kong. Thursday's turnaround on Wall Street represented bargain-hunting and people "trying to buy on the bottom side."

Mainland Chinese shares advanced, shrugging off yet another central bank increase in the reserve requirement for banks -- the fifth such increase in 2011. That move came after the government announced inflation was at 5.3 percent in April, with food prices surging 11.5 percent.

The benchmark Shanghai Composite Index rose 1 percent to 2,871.03, while the Shenzhen Composite Index of China's smaller, second exchange added 0.5 percent to 1,201.37.

"The reserve ratio requirement increases have not had much impact," said Peng Yunliang, a Shanghai-based analyst.

On Wall Street on Thursday, a small recovery in commodities and safe-haven buying of companies that make consumer staples like toilet paper and pasta helped reverse a decline to end the day with modest gains.

Consumer staples and health care led the market due in part to concerns that high gas prices will erode consumer spending and cut into corporate earnings. Companies that sell everyday items or provide health-related products and services are less dependent on economic growth for their profits since people typically spend money on such items even if they cut back elsewhere.

On the down side, the Labor Department said applications for unemployment benefits fell last week to 434,000, slightly less than what economists expected. That report contributed to early losses in the market.

The Dow Jones industrial average gained 0.5 percent to close at 12,695.92. The S&P 500 added 0.5 percent to 1,348.65. The Nasdaq composite rose 0.6 percent to 2,863.04.

Benchmark crude for June delivery was up $1.01 to $99.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 76 cents to settle at $98.97 on Thursday.

In currencies, the euro strengthened to $1.4325 from $1.4231 late Thursday. The dollar slipped to 80.47 yen. The greenback fetched 80.91 yen in New York on Thursday.

[Associated Press; By PAMELA SAMPSON]

AP researcher Fu Ting contributed from Shanghai.

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