World stocks add to gains sparked by Bernanke stimulus vow
An investor knits at a private securities company on July 9, 2013, in Shanghai, China. (AP Photo)
The Associated Press
Published Friday, July 12, 2013 8:00AM EDT
BANGKOK, Thailand -- World stock markets eked out moderate gains Friday, building on a rally sparked by the Fed's vow to continue supporting the U.S. economy, as investors awaited the latest growth figures from China.
Surprisingly weak trade figures this week raised the prospect that China's slowdown will be sharper than anticipated. The central bank has been tightening credit to reduce financial distortions, raising the risk that growth in the world's second-largest economy could fall below 7 per cent. China releases its April-June growth figures on Monday morning.
In early European trading, Britain's FTSE 100 was up 0.4 per cent at 5,569.34 and Germany's DAX added 0.9 per cent to 8,229.02. France's CAC-40 rose 0.3 per cent to 3,879.43.
Global markets charged higher Thursday after Federal Reserve chairman Ben Bernanke said the U.S. needs "highly accommodative monetary policy" -- or low interest rates -- "for the foreseeable future."
That reassured investors who were dismayed by Bernanke's comments last month that the Fed would likely slow its bond purchases later this year and end them around mid-2014 if the economy strengthens. Critics said the Fed bungled its communications strategy.
The Fed has been buying $85 billion of financial assets a month to keep interest rates low and encourage borrowing and spending. That stimulus has driven global stocks higher, so the prospect of reducing it caused market volatility in recent weeks.
But futures augured a muted session on Wall Street after benchmarks hit record highs Thursday. Dow futures were down 0.1 per cent at 15,385 and broader S&P 500 futures fell 0.1 per cent to 1,668.50.
In Asia, Japan's Nikkei 225 index closed up 0.2 per cent at 14,506.25 while Hong Kong's Hang Seng dropped 0.8 per cent to 21,277.28. Australia's S&P/ASX 200 was up 0.2 per cent at 4,973.0.
Benchmarks in China, South Korea and Singapore fell while Taiwan, India, the Philippines, and Thailand gained.
In energy trading, benchmark oil for August delivery was down 41 cents at $104.50 a barrel in electronic trading on the New York Mercantile Exchange. It fell $1.61 to close at $104.91 in New York on Thursday.
The euro fell to $1.3043 from $1.3095 late Thursday in New York. The dollar rose to 99.04 yen from 98.96 yen.