Asian, European markets up after US gains

HONG KONG: World stock markets jumped Wednesday, following Wall Street higher after encouraging reports about the beleaguered US housing sector helped restore confidence in an economic recovery.

Several Asian bourses shot up more than 2 percent after the US market, reversing last month's slide, posted its biggest back-to-back gains in almost three months. Oil prices neared $78 a barrel after surging the day before, while the dollar slipped against the yen and euro.

Investors in Asia found reason for optimism after a major US real estate trade group said its index of pending home sales rose in December. It was the ninth improvement in 10 months and further evidence of healing in an industry at the root of America's downturn.

Having sent markets tumbling over last couple weeks, investors have upped their buying recently amid new signs of a US economic revival and stronger global manufacturing that eased worries, at least for now, about the recovery going off track.

"The overall improvement in the US economy is a clear indicator the world is recovering," said Lucinda Chan of Macquarie Private Wealth in Sydney. "It's not going to be a smooth ride the whole way through, but we're still expecting a solid performance long-term in the market given the improvements in the economy."

Early going in Europe, benchmarks in Britain, France and Germany all added 0.3 percent. Futures augured gains Wednesday on Wall Street. S&P futures rose 1.5 point, or 0.2 percent, to 1,099.

Japan's Nikkei 225 stock average added 33.24 points, or 0.3 percent, to 10,404.33 and Hong Kong's Hang Seng jumped 449.90, or 2.2 percent, to 20,722.08. South Korea's Kospi was up 19.21, or 1.2 percent, to 1,615.02.

Elsewhere, Shanghai's market marched 2.4 percent higher, Australian stocks rose 0.9 percent and Indian shares bounced 2.1 percent.

Among stocks, shares in Toyota tanked nearly 6 percent as fallout from its global recall over faulty gas pedals continued with a top US official accusing the world's largest car maker of dragging its feet on safety concerns. Toyota will be in focus Thursday when it releases quarterly earnings.

Despite the upward swing, analyst said many investors were on edge ahead of US private-sector employment data being released later in the day and the more important nationwide monthly jobs report due Friday. Wednesday's report is expected to show employers slashed about 30,000 private sector jobs last month compared to the 84,000 cut in December, according to analyst estimates.

Adding to anxiety were deteriorating finances in Greece and other Western countries. Investors will be watching Wednesday for the European Commission's assessment of Greece's plan to put its fiscal house in order and cut its massive budget deficit, already more than four times the European Union's 3 percent of GDP limit.

In Asia, a hesitancy to put more money into the market before the extended Chinese New Year holiday also sidelines investors.

"Investors are being cautious. We're still not past all the negative sentiment," said Jackson Wong, investment manager at Tanrich Securities. "Last year was a great year so many people would like to take some profits off the table."

In New York Tuesday, the Dow rose 111.32, or 1.1 percent, to 10,296.85.

The S&P 500 index rose 14.13, or 1.3 percent, to 1,103.32, while Nasdaq composite index advanced 18.86, or 0.9 percent, to 2,190.06.

Oil prices rose in Asia, with benchmark crude for March delivery up 70 cents at $77.92. The contract jumped more than $2 overnight on reports crude demand could improve.

In currencies, the dollar fell to 90.14 yen from 90.36 yen. The euro was higher at $1.4015 from $1.3961.