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World Markets Rise As Double-Dip Fears Ease

Monday, 06 Sep 2010 11:23 AM

 

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World stock markets advanced modestly Monday as investors rode momentum from Friday, when an upbeat U.S. jobs report eased fears that the global economy could slip back into recession.

With Wall Street closed for a holiday, however, trading was expected to remain light.

Markets took heart after official data last week showed private employers in the U.S. added 67,000 jobs in August, more than analysts expected.

The figure bolstered optimism that the U.S. will maintain a slow but steady recovery from last year's recession and avoid another economic contraction later this year.

In Europe, Britain's FTSE 100 index was up 0.2 percent at 5,437.95, Germany's DAX was 0.2 percent higher at 6,144.08 and France's CAC-40 was up 0.1 percent at 3,676.74.

Asian indexes closed higher and Wall Street was expected to add to Friday's gains — Dow industrial average futures were up 0.1 percent at 10,449 and Standard & Poor's 500 futures were up almost 0.1 percent at 1103.80.

With most major governments reining in economic stimulus measures and many pushing through austerity spending cuts to reduce deficits, investors worry the global economy would be pushed into a double dip recession, particularly as the U.S. slows down quickly.

Because the U.S. economy is the world's largest and consumer spending there accounts for a fifth of global economic activity, the stronger-than-expected jobs data on Friday helped calm investors' frayed nerves after weeks of worrying indicators.

"The renewed flight to safety we have witnessed over the past month is overdone and risks an equally large reversal when the worries over a double dip subside," analysts from Rabobank said in a report.

"As the unexciting, steady and below-trend global recovery continues, it's important not to confuse it with a double dip recession."

Japan's benchmark Nikkei 225 stock index climbed 2.1 percent, or 187.19, to 9,301.32 and South Korea's Kospi rose 0.7 percent to 1,792.42.

Hong Kong's Hang Seng index added 1.8 percent to 21,355.77. Australia's S&P/ASX 200 gained 0.8 percent at 4,575.50. Markets in mainland China, Taiwan, India, Indonesia and Singapore were also higher.

The Dow Jones industrial average jumped 1.2 percent to close at 10,447.93 on Friday. The broader Standard & Poor's 500 Index rose 1.3 percent to 1,104.51.

Shares in the U.S. ended the week in the positive, the first time that has happened in a month. The early gains in September mark a stark turnaround from August trade, when shares fell on doubts about the global economic recovery.

The dollar fell to 84.13 yen from 84.27 yen on Friday. The euro was slightly higher at $1.2906 from $1.2895.

Benchmark oil for October delivery was down 22 cents at $74.38 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 42 cents to settle at $74.60 on Friday.

——

Associated Press Writer Alex Kennedy in Singapore contributed to this report.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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