World stocks higher as BOJ keeps easy policy, Shell announces $70 billion takeover of BG

TOKYO – World stock markets were mostly higher Wednesday as Japan’s central bank maintained its expansively easy monetary policy and Royal Dutch Shell announced a $69.7 billion takeover of BG Group.

KEEPING SCORE: Britain’s FTSE 100 rose 0.5 per cent to 6,994.91 while France’s CAC 40 gained 0.3 per cent to 5,166.81. Germany’s DAX slipped 0.1 per cent to 12,107.35. U.S. shares were set for moderate gains. S&P 500 futures rose 0.2 per cent to 2,072.50.

ENERGY DEAL: Royal Dutch Shell agreed to buy BG Group for 47 billion pounds ($69.7 billion) in a cash and stock takeover, showing a shake-up in the energy industry as oil prices fall. A joint statement said the boards of both companies are recommending that shareholders approve the deal. Energy companies are looking to reduce costs and become more efficient in the wake of tumbling oil prices and can do that by combining businesses.

BANK OF JAPAN: The Bank of Japan maintained its policy of super-easy lending, which had been expected. Japan is trying to escape two decades of economic stagnation and deflation by massively expanding the supply of money in the world’s No. 3 economy. Japan’s main index had risen in anticipation that accommodative monetary policy would be maintained and held its gains after the decision was announced.

THE QUOTE: The aggressive monetary stimulus program in Japan has “provided a compelling backdrop for strong Japanese stock performance,” said analyst Nicholas Teo at CMC Markets in Singapore. “Japanese equities have had a tough twenty years mostly languishing in the backseat,” he said. “The Nikkei at around the 20,000 level now, is barely half of where it was in the early 1990s.”

ASIA’S DAY: Japan’s benchmark Nikkei 225 rose 0.8 per cent to close at 19,789.81, which is near a 15-year high. Australia’s S&P/ASX 200 added 0.6 per cent at 5,960.70. Hong Kong’s Hang Seng rocketed 3.8 per cent to 26,236.86 after a five-day long weekend. South Korea’s Kospi climbed 0.6 per cent to 2,059.26. Markets in Southeast Asia were mixed while benchmarks in Shanghai and India rose.

ENERGY: Benchmark U.S. crude was down $1.23 at $52.75 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.84, or 3.5 per cent, to close at $53.98 a barrel in New York on Tuesday. Brent crude, a benchmark for international oils, was down 96 cents at $58.15 a barrel in London.

CURRENCIES: The dollar fell to 119.93 yen from 120.30 yen Tuesday. The euro rose to $1.0858 from $1.0823.