World Stocks Up on US Data, Merkel
AMSTERDAM (AP) - Mildly positive news about the U.S. economy and reassuring words from German Chancellor Angela Merkel about the euro were enough to push global financial markets higher by midday trading in Europe Friday.
European stocks rose in early trading. Britain’s FTSE 100 gained 0.2 percent to 5,846 while Germany’s DAX was 0.2 percent higher at 7,012.51 and France’s CAC-40 added 0.1 percent to 3,484.80.
The U.S. government reported Thursday that building permits jumped to their highest level since August 2008, a hint of stronger construction in the coming months. Meanwhile, networking equipment giant Cisco reported earnings that beat expectations.
While visiting Canada, Merkel repeated her commitment to doing whatever is needed to preserve the euro. In addition, German July producer prices came in lower at 0.4 percent versus expectations of 0.9 percent year on year - potentially giving ammunition to those who argue the European Central Bank could further ease monetary policy if it wishes.
The 17 countries that use the euro have been struggling for the past three years to cope with huge debts and recession. Spain and Italy, the two big trouble spots, are threatened with a financial collapse that could tear the 13-year-old currency union apart and rock the global economy.
"Eurozone markets will inevitably start to focus on the series of meetings between Greek Prime Minister Samaras and various Eurozone leaders next week, but will continue to put on an optimistic spin on Merkel’s comments yesterday," said Monunment Securities Strategist Marc Ostwald in a morning note. He said the University of Michigan Consumer Sentiment Index was likely to be the only data out of the U.S. with the potential to influence markets later, with a thin trading week drawing to a close.
Wall Street appeared on its way to a slightly lower opening after a strong trading session Thursday. Dow Jones industrial futures were flat at 13,225 while S&P 500 futures slipped marginally to 1,412.50.
Stocks in Asia registered broad gains. Japan’s Nikkei 225 index rose 0.8 percent to close at 9,162.50 - its highest finish in more than three months. Hong Kong’s Hang Seng added 0.8 percent to 20,116.07 and Australia’s S&P/ASX 200 gained 0.9 percent to 4,370.10.
"I think the main thing coming out of the macro side is that It looks like the U.S. economy is growing, albeit slowly," said Lorraine Tan, director at Standard & Poor’s equity research in Singapore.
South Korea’s Kospi fell by 0.6 percent to 1,946.54. Mainland Chinese shares were mixed. The Shanghai Composite Index gained 0.1 percent to 2,114.89. The Shenzhen Composite Index lost 0.3 percent to 876.93.
Crude oil futures were down 46 cents to $95.14 per barrel in electronic trading on the New York Mercantile Exchange, following a strong rise Thursday.
In currencies, the euro fell to $1.2356 from $1.2362 late Thursday in New York. The dollar rose to 79.40 yen from 79.25 yen.