World Stocks Rise on Growing Recovery Confidence
World stock markets mostly rose Friday after another batch of positive economic and corporate news helped ease concerns ahead of the publication of stress test results from 91 of Europe’s banks.
In Europe, Germany’s DAX was up 38.84 points, or 0.6 percent, at 6,180.99, while France’s CAC-40 rose 13.80 points, or 0.4 percent, to 3,614.37. Britain’s FTSE 100 index of leading British shares was down 11.57 points, or 0.2 percent, at 5,302.24.
Wall Street was poised for a solid opening — Dow futures were up 25 points, or 0.2 percent, at 10,292 while the broader Standard & Poor’s 500 futures rose 5.6 points, or 0.5 percent, to 1,093.30.
Data showing that Europe’s economy is growing faster than many have predicted helped shore up market optimism ahead of the publication of the stress test results at 1600 GMT (Noon EDT).
Particularly encouraging was the Ifo Institute’s latest monthly assessment of German business confidence. Its main index rose to 106.2 points — far higher than expected — from 101.8 points in June.
“Against the background of double-dip concerns in the U.S., uncertainty over the European banks stress tests, and lingering concerns over the management of the eurozone sovereign debt crisis, the German IFO index managed to post its strongest increase in Germany’s modern history,” said Frederik Ducrozet, an economist at Credit Agricole.
That gave the euro a boost ahead of the publication of the stress test results — by early afternoon London time, the euro was up 0.3 percent at $1.2927.
Meanwhile, the pound enjoyed a big rally after British data showing the U.K. economy growing by a massive quarterly rate of 1.1 percent in the April-June quarter, nearly double market expectations. The pound was up 1.2 percent at $1.5440.
The data proved to be a distraction from the stress test results.
“With the results of the European bank stress tests due after the close, and bearing in mind the gains seen over recent days it would not be a surprise to see a cautious market to finish the week off,” said Anthony Grech, head of research at IG Index.
The goal of the tests is to allay market fears that the banks are in trouble in the wake of the synchronized global recession and the sovereign debt crisis that has taken hold of Europe this year.
Though most of the banks are expected to get the all-clear, there is a great deal of market concern that the tests are not as stringent as they should be, or as rigorous as those applied in the United States around a year ago.
Earlier, nearly all Asian stock markets advanced after Wall Street soared Thursday after Caterpillar Inc., Microsoft, UPS Inc. and other companies beat analysts’ forecasts. A better-than-anticipated report on housing also reassured investors that the recovery, while uncertain, is continuing.
Japan’s Nikkei 225 stock average jumped 2.3 percent to close at 9,430.96 while Hong Kong’s Hang Seng index rose 1.1 percent to 20,815.33. South Korea’s Kospi advanced 1.3 percent to 1,758.06, and Australia’s S&P/ASX 200 gained 1.9 percent to 4,458.40.
Benchmark crude for September delivery was down 28 cents at $79.02 a barrel in electronic trading on the New York Mercantile Exchange. The contract surged $2.74 on Thursday to settle at $79.30, a 10-week high alongside the rally in stocks.
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Associated Press Writer Pamela Sampson in Singapore contributed to this report.
PAN PYLAS, AP Business Writer LONDON