World stocks rise amid US job hopes

World stocks rose today, assisted by an absence of bad financial news and signs that the US economy may be strengthening.

Benchmark oil hit $102 per barrel while the dollar fell against the euro and the yen.

Stock markets were higher in early European trading, tracking gains in Asia. Britain’s FTSE 100 rose 0.9% to 5,662.63, Germany’s DAX jumped 1.4% to 6,100.30 and France’s CAC-40 rose 1.6% at 3,177.48.

Ahead of the opening bell, Wall Street appeared set for a higher opening. Dow Jones industrial futures rose 0.5% to 12,402 and S&P 500 futures gained 0.6% to 1,283.10.

Japan’s Nikkei 225 index, reopening after a three-day holiday weekend, added 0.4% to close at 8,422.26, Hong Kong’s Hang Seng index rose 0.7% to 19,004.28, while South Korea’s Kospi jumped 1.5% to 1,853.22. Australia’s S&P ASX 200 was up 1.1% at 4,152.20. Benchmarks in Singapore, Taiwan, and Indonesia also posted gains.

Improving economic data out of the US was one key factor working in favour of markets, said Cameron Peacock, of IG Markets in Melbourne.

The US added 200,000 jobs in December in a burst of hiring that drove the unemployment rate down two notches to 8.5%, its lowest in almost three years. That led economists to conclude that the improvement in the job market might just last.

“With all the problems of the last few years, and the emergence of China as a legitimate economic superpower, it should not be forgotten that the US is still the world’s largest and most influential economy,” Mr Peacock said in a report.

Energy-related shares rose as oil prices firmed up. South Korean refinery S-Oil gained 2.3%, while Japanese energy explorer Inpex gained 2.7%. Hong Kong-listed China Petroleum & Chemical added 1.4%.

Heavy machinery shares also rose. South Korean power equipment maker Doosan Heavy Industries & Construction gained 4.1% and Hyundai Heavy Industries rose 4%. Japan’s Hitachi Construction Machinery rose 1.9%.

Olympus soared 19.9%, following a report in The Nikkei financial daily yesterday that the scandal-hit company is likely to remain listed on the Tokyo Stock Exchange.

The company, which has acknowledged using fraudulent methods to hide staggering investment losses dating back to the 1990s, had been threatened with delisting. The stock is still trading at about half its value prior to the scandal.

Japanese exporters, meanwhile, continued to feel the pinch of a strong yen, which lowers the value of expatriated profits and makes Japanese products more expensive overseas.

Mazda Motor fell 2.2%, Canon dropped 1.5% and Nikon slid 1%.

Stocks advanced in mainland China, as investors continued to cheer Premier Wen Jiabao’s promise last weekend to channel lending to entrepreneurs who have been battered by weak global demand.

The benchmark Shanghai Composite Index gained 2.7% to 2,285.74, the highest closing in almost one month. The smaller Shenzhen Composite Index gained 3.9% to 880.86.

“The market continued to rise mainly due to inspiration from Wen Jiabao during the National Financial Work Conference in Beijing last Saturday,” said Yang Yining, an analyst at Capital-edge Investment & Management Co in Shanghai.

“There is some room for gains in the short term due to earlier losses. The long term will depend more on the economic outlook and corrections in the real estate industry,” he added.

Trade figures for the world’s second largest economy weakened in December. Growth in imports fell to 11.8%, barely above half the previous month’s 22.1% gain. Exports rose 13.4%, down slightly from November’s growth rate.

Benchmark crude for February delivery rose $1.14 to $102.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $101.31 in New York yesterday.

In currency trading, the euro rose to $1.2769 from $1.2762 in New York late yesterday. The dollar fell to 76.85 yen from 76.89 yen.