World stocks higher ahead of G-20 meeting

AP, Thursday 14 Feb 2013

Worldwide stocks surge before G-20 weekend meeting

World stock markets moved cautiously higher Thursday, brushing off disappointing news about German growth ahead of a major economic summit over the weekend.

European stocks rose in early trading. Britain's FTSE 100 was marginally higher at 6,360.73. Germany's DAX added 0.2 percent to 7,727.38. France's CAC-40 advanced 0.3 percent to 3,708.97. Wall Street futures were flat. Dow Jones industrial futures rose slightly to 13,959 while S&P 500 futures shed less than a point to 1,516.90.

Official figures showed that Germany's economy shrank in the fourth quarter of 2012, a drop primarily due to weakening demand of German products in other European nations. Germany relies heavily on exports to other European countries, many of which are in recession.

Still, markets proved resilient ahead of a meeting this weekend of finance ministers of the Group of 20 major advanced and developing nations in Moscow.

Asian stock markets finished mostly higher. Japan's Nikkei 225 index rose 0.5 percent to close at 11,307.28.

The Tokyo market brushed aside data showing the Japanese economy shrank for a third straight quarter in the last three months of 2012, as investors expected the yen's recent weakness will boost company earnings.

The Bank of Japan ended a policy meeting Thursday with no new initiatives, which was the expected outcome ahead of an impending leadership change at the central bank.

Its governor Masaaki Shirakawa, who has appeared at odds with Prime Minister Shinzo Abe's views, is resigning next month, giving the government an opportunity to find a successor more sympathetic to Abe's push for ultra-loose monetary policy.

South Korea's Kospi rose 0.2 percent to 1,979.61. Australia's S&P/ASX 300 advanced 0.7 percent to 5,036.90 largely due to gains in the resource sector. Hong Kong's Hang Seng added 0.9 percent to 23,413.25 amid muted trading. Markets in Singapore and the Philippines fell while mainland China and Taiwan remained closed for Lunar New Year holidays.

Francis Lun, managing director of Lyncean Holdings in Hong Kong, said the local market was being led higher by financial stocks on "a rumor" that Chinese banks would be given permission to increase lending. Agricultural Bank of China rose 3.4 percent. Industrial & Commercial Bank of China, the world's largest bank by market value, advanced 2.5 percent.

The Hang Seng, reopening after a three-day holiday, displayed no sign of distress over North Korea's underground nuclear test that took place Tuesday.

"Unless they throw a nuclear bomb at South Korea or Japan, nobody thinks much of it," Lun said.

Among individual stocks, Australian aluminum producer Alumina surged 7.5 percent after Chinese financial company CITIC paid 452 million Australian dollars for a major stake in the company.

Benchmark oil for March delivery was up 27 cents in electronic trading to $97.28 per barrel on the New York Mercantile Exchange. The contract dropped 50 cents to finish at $97.01 a barrel on the Nymex on Wednesday.

In currencies, the euro fell to $1.3396 from $1.3447 late Wednesday in New York. The dollar was almost unchanged at 93.47 from 93.48 yen.

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