China figures shore up markets

LONDON (AP) ? Mounting hopes over China's economy combined with signs that the U.S. recovery is gaining traction to shore up markets, particularly in Asia, Friday.

Following a lackluster start to the week, investors have since been cheered by the signals showing the two world's largest economies have started 2013 in relatively rude health. Many stock indexes around the world, including the Dow, are trading are multiyear highs amid optimism over the world economy and hopes that Europe's debt crisis is slowly coming under control.

On Thursday, figures showing weekly U.S. jobless claims down at a five-year low and a strong rebound in housing starts turned the mood around. That buoyant backdrop carried through into the Asian session on Friday and that was accentuated by figures showing China's economy, the world's number 2, grew 7.9 percent in the fourth quarter of 2012, up from the previous quarter's 7.4 percent and just ahead of predictions for a 7.8 percent rise. Industrial production and retail sales figures also came in better than expected.

In Europe, the FTSE 100 index of leading British shares was up 0.3 percent at 6,147 while the CAC-40 in France rose 0.1 percent to 3,747. Germany's DAX was 0.2 percent lower at 7,721.

"The new year rally continues unabated," said Rebecca O'Keeffe, head of investment at Interactive Investor. "Today it is being sustained by positive news from China."

Wall Street was poised for a flat opening, with both Dow futures and the broader S&P 500 index unchanged. Both indexes closed Thursday at their highest levels in five years.

Later, the focus will return to the latest batch of U.S. corporate earnings, including figures from Morgan Stanley. So far, bank earnings have been mixed.

"After slightly disappointing results from both Citi and Bank of America, it is Morgan Stanley's moment in the spotlight today," said Gary Jenkins, managing director of Swordfish Research.

The monthly consumer sentiment survey from the University of Michigan is also released shortly after U.S. markets open and that has the potential to swing the mood one way or the other.

Earlier in Asia, Japan's Nikkei 225 soared 2.9 percent to close at 10.913.30, the highest finish in nearly three years, as the yen slipped against the dollar.

For a while, the dollar was trading above the 90-yen line for the first time since June 2010 as expectations intensified that the Bank of Japan will take steps to ease credit next week. A weaker yen is a significant boost for Japan's powerhouse exporters. By midmorning London time, the dollar sup up 0.1 percent at 89.90 yen.

Hong Kong's Hang Seng rose 1.1 percent to 23,601.78 and South Korea's Kospi added 0.7 percent to 1,987.85. Australia's S&P/ASX 200 rose 0.3 percent to 4,771.20.

In mainland China, the Shanghai Composite Index rose 1.4 percent to 2,317.07 while the smaller Shenzhen Composite Index gained 1.5 percent to 935.7

Oil prices were fairly subdued following recent strong gains, with the benchmark New York rate down 20 cents at $95.29 a barrel. On Thursday, the contract gained $1.25 to finish at $95.49 a barrel, its highest close since last September.

Elsewhere, the euro, which has had a strong start to the year amid hopes over Europe's debt crisis, was down 0.1 percent on the day at $1.3353.

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Pamela Sampson in Bangkok contributed to this report.

Source: http://news.yahoo.com/china-figures-shore-markets-131239773--finance.html

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