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World stocks rise on solid global growth figures

World stocks rise on solid global growth figures

World stocks rose strongly Thursday as investors put Europe's debt problems behind them _ for now _ and instead concentrated on strong Asian economic growth figures and further confirmation that the U.S. economy continues to grow at a fairly strong rate.
European markets followed their Asian counterparts higher, with the FTSE 100 index of leading British shares up 111.82 points, or 2.2 percent, at 5,149.90 while Germany's DAX rose 152.24 points, or 2.6 percent, at 5,910.26. The CAC-40 in France was 80.56 points, or 2.4 percent, at 3,489.15.
On Wall, stocks opened sharply higher _ the Dow Jones industrial average was up 149.41 points, or 1.5 percent, at 10,123.86 while the broader Standard & Poor's 500 futures rallied 19.36 points, or 1.8 percent, at 1,087.31.
Lower than anticipated U.S. growth figures did nothing to dispel the optimism in stock markets at least _ the Commerce Department reported that the world's largest economy grew at a 3 percent annual rate from January to March, slightly down on the initial estimate of 3.2 percent a month ago and expectations for a modest increase to 3.4 percent.
Despite lower than expected growth, the figures showed that the U.S. continues to grow than its major competitors, such as the 16-country eurozone and Japan.
"Today's data indicates that the economic recovery is in full swing, despite the lagged rebound in employment and confidence," said Michael Woolfolk, an analyst at Bank of New York Mellon.
The market rally was triggered by upbeat activity in Asia and a sharp denial Thursday from Chinese authorities that they are reviewing their holdings of euro-denominated assets.
The agency that manages China's $2.5 trillion foreign reserves denied a Financial Times report that China was considering cutting its exposure to European assets and expressed confidence Europe will restore its financial stability.
China's State Administration of Foreign Exchange, which rarely comments on its activities, said talk of a review was "groundless" and stressed that the European market "in the past, present and future always will be one of (its) the major investment markets."
That sharp denial helped ease concerns that the euro would lose one of its major props and the single currency spiked 0.4 percent to $1.2209 _ earlier fears of a Chinese exodus had sent the currency plunging to $1.2155 and near its four-year low posted to $1.2146.
Earlier, robust first-quarter economic figures from China, Japan, Singapore, Taiwan and Malaysia, had raised hopes the region can absorb any downturn in Europe.
In Asia, Japan's Nikkei 225 stock average rose 1.2 percent to 9,639.72 while South Korea's Kospi jumped 1.6 percent to 1,607.50. Australia's S&P/ASX 200 index gained 1.7 percent to 4,379.10.
Hong Kong's Hang Seng added 1.2 percent to 19,431.37 and benchmarks in China, Singapore, Thailand and Malaysia all rose more than 1 percent.
"Despite the turmoil in financial markets, the near-term outlook for the world economy is brighter than a few months ago," Capital Economics said in a report. "In many countries, the mood in the markets is much gloomier than the latest economic data and surveys of business and consumer confidence would suggest."
Capital Economics said it raised its 2010 global gross domestic product growth forecast to 4.5 percent from 4.0 percent.
The rebound in sentiment has helped oil prices rally too _ benchmark crude for July delivery was up $1.56 to $73.07 a barrel in electronic trading on the New York Mercantile Exchange.
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Associated Press Writer Alex Kennedy in Singapore contributed to this report.


Updated : 2021-04-15 01:28 GMT+08:00