Markets higher on good news from Europe, Japan
By TOBY STERLING
THE ASSOCIATED PRESS | January 26,2013
Pedestrians look at an electronic stock board of a securities firm in Tokyo on Friday.
AMSTERDAM ó Positive economic news from the European Central Bank and Germany, combined with promises of more monetary easing in Japan, helped stock indexes in those countries lead most markets around the world higher Friday.
U.S. stocks rose in early trading, helped by a strong quarterly earnings report from Procter & Gamble.
In Japan, stocks were galvanized by a further drop in the value of the yen, which is expected to help big exporters like Sony. The Nikkei index surged 2.9 percent to 10,926.67, its highest close since April 30, 2010.
The European Central Bank announced Friday that banks were expected to pay back emergency loans at a faster-than-expected clip, implying that the outlook is improving or the likelihood of disaster scenarios is receding. At the World Economic Forum in Davos, Switzerland, ECB President Mario Draghi repeated the continentís economy appears to be stabilizing and he expects recovery later this year.
Meanwhile, in Germany, business sentiment as measured by the Ifo index rose to its highest level since June, as executives said order backlogs are rising.
The Ifo report ďnicely illustrates the green shoots in the German economy,Ē said ING senior economist Carsten Brzeski in Brussels.
ďEven if the current harsh winter weather might delay the blossoming somewhat, growth should return, leaving the contraction of the fourth quarter quickly behind.Ē
Germanyís DAX ended Friday 1.42 percent higher at 7,857 points, the strongest performer in Europe. Franceís CAC-40 was up 0.7 percent to 3,778.
Britainís FTSE 100 rose 0.3 percent, to 6,284, after official figures showed the U.K. economy contracted 0.3 percent in the fourth quarter. The drop was worse than expected and shows the economy is struggling to make any lasting recovery.
Meanwhile, Wall Street booked early gains as Procter & Gamble said its quarterly profit doubled in the October-December period and it raised its 2013 forecasts.
The Dow Jones industrial index was 0.37 percent higher at 13,875, while the broader S&P 500 gained 0.34 percent to 1,499.8.
The weaker yen is bad for U.S. exporters, but the effect of that was offset somewhat by a rise in the euro, which was up 0.65 percent to $1.3466.
The yenís drop was unambiguously bad for other Asian economies, as their own goods lose appeal to U.S. consumers.
South Koreaís Kospi fell 1 percent to 1,943.97. Hong Kongís Hang Seng lost 0.1 percent to 23,580.43.
In mainland China, the Shanghai Composite Index fell 0.5 percent to 2,291.30 and the smaller Shenzhen Composite Index lost 0.2 percent at 909.52.
In Australia, the outlier, the S&P/ASX 200 rose 0.5 percent to 4,835.20.
Benchmark oil for March delivery gave back earlier gains to be 9 cents lower at $96.87 per barrel in electronic trading on the New York Mercantile Exchange.