World stock markets headed higher Thursday amid optimism about the U.S. economy, while oil prices climbed after OPEC kept production levels unchanged.
European markets were modestly green in early trade after some major Asian bourses advanced 2 per cent or more. The dollar was little changed against the euro after hitting a fresh low for the year overnight.
Buoying sentiment were overnight gains on Wall Street after the U.S. Federal Reserve said the world’s largest economy showed more signs of stabilization in recent months.
But while there were improvements in manufacturing and other areas in the broader economy, the central bank’s reports suggested weakness in retail sales and the job market would hold down consumer spending. Some analysts said that was reason enough to stay cautious.
“The fundamentals are better but still not supportive for a strong recovery,” said Peter Lai, investment manager at DBS Vickers in Hong Kong. “These types of figures aren’t cause for celebration. Unemployment is rising and consumers are still hurting. The higher the market is the more fear I have.”
In Europe, Britain’s FTSE 100 added 0.2 per cent, Germany’s DAX was 0.5 per cent higher and France’s CAC-400 rose 0.3 per cent. Wall Street futures pointed to a higher open Thursday in the U.S.
Japan’s benchmark Nikkei 225 index rose 201.53 points, or 2 per cent, to 10,513.67
Hong Kong’s Hang Seng rose 218.52, or 1.1 per cent, to 21,069.56, Korea’s Kospi was up 2.3 per cent at 1,644.68 and India’s gained 0.6 per cent to 16,280.04.
Markets in Australia and Taiwan climbed 1.1 per cent.
Among major benchmarks, only mainland China’s was lacklustre, with the Shanghai’s index down 0.7 per cent.
Tech shares such as Japan’s Elpida Memory, up 3.5 per cent in Tokyo, were strong after American chip maker Teas Instruments upped its sales forecasts. Meanwhile, Taiwan’s Foconn International Holdings, a major contractor for Apple Inc., jumped 6.5 per cent in Hong Kong after the U.S. tech giant’s CEO Steve Jobs made a public appearance for first time since his medical leave to announce new products.
Investors showed little reaction to Asia’s economic news for the day.
Japan’s core machinery orders, a closely watched indicator of corporate capital spending, fell in July after a rise in the previous month, suggesting a patchy recovery in the world’s second-largest economy. South Korean and New Zealand central banks, issuing cautious views about their economic prospects, kept their interest rates unchanged as expected.
Overnight in the U.S., the Dow Jones industrial average rose 49.88, or 0.5 per cent, to 9,547.22. The inde has added 267 points, or 2.9 per cent, in four days. It was the Dow’s second-highest close of the year, just below its Aug. 27 finish of nearly 9,581.
The broader Standard & Poor’s 500 index gained 7.98, or 0.8 per cent, to 1,033.37, while the Nasdaq composite rose 22.62, or 1.1 per cent, to 2,060.39.
Stock futures pointed to gains Thursday on Wall Street. Dow futures were up 23, or 0.2 per cent, at 9,561 and S&P futures rose 3.2, or 0.3 per cent, to 1,035.70.
In oil, benchmark crude for October delivery was up 79 cents at $72.10 in Asian trade as the Organization of Petroleum Exporting Countries decided to keep output levels steady.
The dollar rose to 92.13 yen from 91.95 yen late Wednesday. The euro fell to $1.4548 from $1.4557.