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World shares up on strong US earnings, indicators

World stocks marched higher today amid Lunar New Year holidays that have closed several major markets in Asia, boosted by strong US earnings and positive economic indicators.

business Updated: Feb 02, 2011 15:42 IST

World stocks marched higher on Wednesday amid Lunar New Year holidays that have closed several major markets in Asia, boosted by strong US earnings and positive economic indicators. Oil prices hovered below $91 a barrel after a report showed US gasoline and crude supplies rose more than expected last week, suggesting the recovery in demand remains uneven. In currencies, the dollar was up against the yen but lower against the euro. European bourses were higher in early trading. Britain's FTSE 100 was 0.7% higher at 6,000.96. Germany's DAX rose 0.4% to 7,211.62. The CAC-40 in Paris was up 0.3% to 4,086.10. Wall Street was headed for a higher opening after a strong day of trading Tuesday, with Dow futures up 0.1% to 11,988 and S&P futures 500 narrowly higher to 1,303.30.

Japan's benchmark Nikkei 225 stock average gained 1.8% to close at 10,457.36, with Toyota Motor Corp. shooting up 3.3%. Australia's S&P/ASX index added 0.9% to 4,794.20. Gainers included mining giant BHP Billiton, up 2.4%. Shares in New Zealand, Singapore, the Philippines and Indonesia were all higher. "The market is once again focusing on improving economic growth prospects and accompanying inflation, which are best reflected by investors shifting from bonds into equities," DBS Bank Ltd. in Singapore said.

"The more these healthy trends persist, the less attention investors would pay to transient risks associated with disasters and geopolitical risks," DBS said, referring to the unrest that has brought the Egyptian government to the verge of collapse. Markets in China, Korea and Taiwan were closed Wednesday for the Chinese Lunar New Year. Hong Kong's Hang Seng advanced 1.8% to 23,908.96 amid a last-minute rush for bargains ahead of the exchange's close at midday.

The gains came after a strong showing on Wall Street, where the Dow Jones industrial average gained 1.1%, to 12,020 and the broader S&P 500 rose 1.6% to 1,306. Both closed at their highest levels since mid-2008 amid the release of positive US manufacturing data.

The Institute for Supply Management said manufacturing activity expanded last month at its fastest pace in nearly seven years amid increased spending by businesses and consumers. And employment improved at the nation's factories.

Markets were also regaining their footing following downturns precipitated by protests in Egypt against the three-decade rule of President Hosni Mubarak. The Dow fell 1.4% Friday, its largest drop in more than two months, because of concerns that the protests in Egypt could disrupt the global oil business. Egypt controls the Suez Canal, a vital route for oil tankers and cargo ships.

A spate of strong earnings including Pfizer Inc. and United Parcel Service Inc. cheered investors in the US on Tuesday. UPS said its 2011 earnings will likely top its pre-recession levels from 2007. UPS gained 4%. Pfizer said its fourth-quarter profit nearly quadrupled. The company narrowly beat analyst estimates and gained 5.5%.

In currencies, the dollar rose to 81.50 yen from 81.40 yen late Tuesday. The euro rose to $1.3828 from $1.3820 late Tuesday. Benchmark crude for March delivery was down 2 cents at $90.77 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.42 to settle at $90.77 on Tuesday.