World stocks rise as growth hopes best debt fears

By ALEX KENNEDY Associated Press Writer

SINGAPORE (AP) - World stock markets advanced Thursday as concerns about a European debt crisis waned and investors turned to signs of a growing global economy.

In early European trading, Britain's FTSE 100 rose 0.1 percent, Germany's DAX added 0.5 percent and the CAC-40 in France was ahead by 0.1 percent. Dow futures pointed to stocks gaining slightly at the U.S. open.

Earlier in Asia, Japan's benchmark Nikkei 225 stock average rose 2.2 percent to 10,620.55 with improving corporate earnings also boosting sentiment in Tokyo.

South Korea's Kospi gained 1.9 percent to 1,694.58 and Hong Kong's Hang Seng added 1 percent to 20,442.46. Australia's S&P/ASX 200 index was advanced 1.8 percent at 4,652.80 and benchmarks in Taiwan, India and Indonesia also climbed.

The Asian rally followed a big day on Wall Street, where the Dow Jones industrial average climbed 148.65 points, or 1.4 percent, to 10,896.91 - the highest level since May 4.

Spain announced a plan Wednesday to cut its big deficit, and analysts said the market's rebound from last week's drop reflects growing confidence that Europe's debt problems are contained for now. Positive economic reports from the U.S. and Europe also helped reassure markets that the global recovery is intact.

China's benchmark index in Shanghai jumped 2.1 percent as analysts predicted government measures to cool soaring property prices won't undermine the banking system. Citigroup said residential real estate values will likely drop up to 25 percent from recent peaks, but that shouldn't have much impact on bank mortgages or loans to developers.

"Chinese markets have been dogged by concerns over the duration and the extent of macroeconomic tightening policies, but the underlying fundamentals of the Chinese economy continue to be robust," said Gigi Chan, a fund manager with London-based Threadneedle, which manages about $100 billion of assets.

The Standard & Poor's 500 index rose 1.4 percent to 1,171.67 on Wednesday while the Nasdaq rose 2.1 percent to 2,425.02.

Benchmark crude for June delivery was down 77 cents at $74.87 in electronic trading on the New York Mercantile Exchange, extending the previous day's big drop after the International Energy Agency said global oil demand is expected to rise less than previously expected in 2010.

In currencies, the dollar rose to 93.27 yen from 93.21 yen while the euro fell to $1.2582 from $1.2628 late Wednesday in New York.