Global stock markets rally on US recovery hopes

SEOUL, South Korea – Global stock markets rallied Wednesday as solid U.S. data raised expectations for a strong recovery in the world’s largest economy. European stocks were buoyed also by a deal to get Greece more rescue loans.

KEEPING SCORE: Britain’s FTSE 100 rose 0.6 per cent to 6,255 while France’s CAC gained 0.9 per cent to 4,472. Germany’s DAX advanced 1.3 per cent to 10,185. Futures augured gains on Wall Street. Dow and S&P futures both rose 0.4 per cent.

GREECE DEAL: Greece got approval overnight to get the next batch of its bailout loans from its eurozone creditor nations. The deal removes the risk that Greece might default on its debts in coming months. The creditors also discussed how to lighten the country’s debt load.

U.S. RECOVERY: Investor sentiment was also upbeat from the day before, when the U.S. Commerce Department said that new home sales leaped 16.6 per cent last month to a seasonally adjusted rate of 619,000, the highest level since January 2008. Steady job gains and low mortgage rates have encouraged more Americans to buy new homes in a sign that the housing market and the broader economy are in good shape.

ANALYST’S TAKE: “Such upbeat data have dissipated doubts concerning the recovery in the housing sector,” Mizuho Bank said in a daily commentary. “While this strengthens expectations that the Fed may be more comfortable to raise (its) policy rate in summer, markets do not appear to be unsettled.”

ASIA’S DAY: Japan’s Nikkei 225 rose 1.6 per cent to 16,757.35 and Hong Kong’s Hang Seng index jumped 2.7 per cent to 20,368.05. South Korea’s Kospi gained 1.2 per cent to 1,960.51 while Australia’s S&P/ASX 200 advanced 1.5 per cent to 5,372.50. Stocks in Taiwan, Singapore and Southeast Asia also gained.

OIL: Benchmark U.S. crude gained 52 cents to $49.14 per barrel in New York. The contract finished 54 cents higher on Tuesday. Brent crude, used to price international oils, rose 55 cents to $49.73 a barrel in London.

CURRENCIES: The dollar rose to 110.17 yen from 110.06 yen. The euro strengthened to $1.1145 from $1.1143.