World markets mostly higher on Dow record

Mar 07, 2013, 4:27 AM EST
REUTERS/Brendan McDermid

BANGKOK (AP) — World stock markets were mostly higher Thursday following Wall Street's eye-popping performance this week. Japan's Nikkei 225 index had its highest close in four years.

Investors waded into stocks after the Dow Jones industrial average reached a new high for a second day Wednesday and the Federal Reserve said the U.S. economy grew in the first two months of the year.

Britain's FTSE 100 rose 0.3 percent to 6,444.69. Germany's DAX added 0.1 percent to 7,928.56. France's CAC-40 advanced 0.3 percent to 3,785.82. Futures on Wall Street signaled yet another day of gains. Dow Jones industrial futures rose 0.2 percent to 14,287 and S&P 500 futures added 0.1 percent at 1,540.40.

The Nikkei in Tokyo rose 0.3 percent to close at 11,968.08, after breaking through the 12,000 mark earlier in the session. The Bank of Japan wrapped up a two-day meeting without announcing new monetary policy measures. The meeting was the last to be headed by Masaaki Shirakawa, who steps down March 19.

The incoming chief, Haruhiko Kuroda, is expected to ease monetary policy to support the policies of new Prime Minister Shinzo Abe. A former vice minister of finance, Kuroda has long voiced his support for bolder central bank policies and for a weaker currency to help boost export manufacturers by making their products cheaper in overseas markets.

"The BOJ will remain under pressure to ease policy throughout 2013. The next round of substantive easing is likely to come in April at the earliest, after the new governor takes office," said analysts at DBS Bank Ltd. in Singapore.

Disappointing trade figures pulled Australian stocks down. Australia's trade deficit widened to 1.06 billion Australian dollars in January, official figures show. Economists had expected a deficit of about half that.

On top of that, data on Australia's economy released Wednesday showed 0.6 percent growth in the fourth quarter compared to the previous three-month period. But there were also worrisome signs, analysts said, with a cooling mining sector expected to weigh on stocks in the coming months.

"Yesterday's GDP data wasn't all rosy. Business investment fell sharply, sending another signal that the mining boom is coming to an end. Today's trade data was bit worse than expected, and that probably explains most of today's pull back," said Daniel Martin of Capital Economics in Singapore.

Australia's S&P/ASX 200 fell 0.2 percent to 5,109.20. Hong Kong's Hang Seng slipped marginally to 22,771.44. South Korea's Kospi shed 0.8 percent to 2,004.40.In mainland China, the Shanghai Composite Index fell 1 percent to 2,324.29, while the smaller Shenzhen Composite Index lost 1.1 percent to 968.34. Shares in wine producers, coal miners and paper processing led the gains while aviation and environmental protection weakened.

"The loss was a correction after earlier gains, while the market will remain unstable until there is more clarification in China's housing policies," said Guo Yanhong, an analyst at Huachuang Securities, based in Beijing.

The Dow Jones industrial average rallied to new high Wednesday, blowing past the record set just the day before, after a Federal Reserve survey showed moderate expansion of the U.S. economy for the first two months of the year. The "Beige Book" survey noted that 10 of the Fed's 12 banking districts reported moderate or modest growth, while the Boston and Chicago districts reported slow growth.

The gains on Wall Street were also fueled by a positive jobs report. Payroll processor ADP said Wednesday that private employers added 198,000 jobs in February. The figure suggests that Friday's February employment report from the U.S. government may come in above economists' forecasts.

Benchmark oil contract for April delivery was up 12 cents to $90.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 39 cents to finish at $90.43 on the Nymex on Wednesday.

In currencies, the euro rose to $1.3023 from $1.2994 from late Wednesday in New York. The dollar fell to 93.92 yen from 94.06 yen.


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AP researcher Fu Ting contributed from Shanghai.