World stock markets gain as Greece fears ease

June 21, 2011 - 5:44 AM

BANGKOK (AP) — World shares posted gains Tuesday after confidence got a boost from Europe's vow to contain the Greek debt crisis.

Oil prices rose above $94 a barrel. The dollar was lower against the euro and the yen.

European shares were higher in early trading. Britain's FTSE rose 0.8 percent to 5,739.98. Germany's DAX was 0.9 percent higher at 7,215.61 and France's CAC-40 rose 1.2 percent to 3,844.43.

Wall Street was headed for a higher opening, too, with Dow Jones industrial futures and S&P 500 futures both up 0.5 percent to 12,069 and 1,279.90, respectively.

Earlier in Asia, a number of key indexes were higher by 1 percent or more. Japan's Nikkei 225 gained 1.1 percent to close at 9,459.66, a day after the government upgraded its economic assessment for the first time in four months, as the world's No. 3 economy continued to battle back from a devastating earthquake on March 11.

Shares of Nissan Motor Co. rose after announcing joint development with Mitsubishi Motors Corp. of a mini-vehicle for the Japanese market in the first half of fiscal 2013. Nissan rose 3.1 percent while Mitsubishi was 2.2 percent higher.

Hong Kong's Hang Seng gained 1.2 percent to 21,850.59, with some real estate stocks regaining ground. Property shares faced a sell-off Monday following speculation that the government might resume a public housing program, which would push up the supply of moderately priced and affordable dwellings. Blue chip developers China Overseas Land & Investment Ltd. rose 2.2 percent, while China Resources Land Ltd. was 1.5 percent higher.

South Korea's Kospi added 1.4 percent to 2,048.17. A government report showed the country achieving the fastest export growth among the world's top 10 trading nations in the first four months of 2011, Yonhap News agency said.

POSCO, one of the world's largest steel producers, jumped 4.2 percent and LG Electronics Inc., the world's No. 2 maker of flat screen televisions, rose 4.7 percent.

Australia's S&P/ASX 200 climbed 1.3 percent to 4,508.20. Shares of beer-maker Foster's Group Ltd. soared 13.5 percent after the company rejected a 9.5 billion Australian dollar ($10 billion) cash takeover offer from London-based SABMiller PLC, saying the bid undervalues the Australian company.

Elsewhere, benchmarks in Singapore, Taiwan, Indonesia and the Philippines were higher while shares in New Zealand slipped.

Signs that the European financial crisis may be contained helped ease investors' concerns. European Union officials in Luxembourg said Monday that the EU would take steps to prevent Greece's debt problems from affecting other struggling countries like Ireland and Portugal.

Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong, said markets are enjoying a technical rebound after having been oversold, but that investors were holding back, ahead of a Federal Reserve meeting this week. When they meet Tuesday and Wednesday, Fed officials will likely discuss what they might do to help shield U.S. banks and a still fragile U.S. economy if Europe's crisis worsened.

"Upward momentum is relatively weak, reflecting that investor sentiment remains cautious," he said. "Fortunately there seems to be progress in the Europe debt crisis."

In New York on Monday, investors largely put aside their concerns about the Greek financial crisis and focused on value, analysts said, snapping up shares at bargain prices.

The S&P 500 index rose 0.5 percent to close at 1,278.36. The Dow Jones industrial average added 0.6 percent to 12,080.38. The Nasdaq composite gained 0.5 percent to 2,629.66.

Benchmark oil for July delivery was up $1.28 to $94.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 25 cents to settle at $93.26 on Monday.

In London, Brent crude for August delivery was down 30 cents to $111.39 a barrel on the ICE Futures exchange.

In currencies, the euro rose to $1.4333 from $1.4190 late Monday in New York. The dollar dropped to 80.21 yen from 80.32 yen.