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World stocks up after US bank test
Published in Saudi Press Agency on 08 - 05 - 2009

World stocks rose Friday as investors braced for a key U.S. jobs report that could bolster _ or undercut
_ a growing belief that recession in the world's largest
economy is starting to ease, according to AP.
Results from the U.S. government's long-awaited bank
«stress tests» also proved to be roughly within
expectations, lifting uncertainty over the market and
supporting equities.
In morning trading in Europe, Britain's FTSE 100 was up
1.4 percent to 4,458.23, Germany's DAX added 2.5 percent to
4,922.24, and France's CAC 40 grew 2 percent to 3,316.05.
Wall Street was set to open higher. Dow Jones industrial
average futures climbed 1 percent to 8,467 and Standard &
Poor's 500 futures were 1.1 percent higher at 917.10.
Shares across Asia recovered from lows after the
announcement of the U.S. stress tests.
A two-month surge in global markets has gained paced over
the last week as signs of a pulse in economies, industries
and companies worldwide continue to feed hopes of a
year-end recovery.
Investors will be eyeing Friday's U.S. April jobs survey _
regarded by Wall Street as the most important economic
indicator each month _ for any evidence of that rebound.
Analysts expect the jobless rate will climb to 8.9 percent
from the current 25-year high of 8.5 percent. Many experts
expect the jobless rate to hit 10 percent by the end of
this year.
However, some optimism ahead of the data release was
stoked by the ADP payrolls firm, which estimated Wednesday
that only 491,000 jobs were lost in April in the U.S. _ the
lowest since November.
«There is this growing anticipation after the ADP release
on Wednesday that we're going to see a pretty healthy
reading on the job report later today,» said Stephen Pope,
chief global markets strategist for Cantor Fitzgerald. He
said a healthy reading would be indicated by the jobless
rate rising less quickly than in previous months.
In Europe and Asia, financials advanced after the Obama
administration's tests of major banks showed nine of the 19
biggest lenders have enough capital to endure a deeper
recession, but 10 must raise a total of $75 billion in new
capital to withstand possible future losses.
The results, which analysts say showed the U.S. banking
sector is vulnerable but viable, were largely in line with
the trickle of reports leaked days before.
«The stress test results only indicated 10 needed money
but no one is in such a bad state they face extreme
difficulties,» said Pope.
Deutsche Bank shares added 4 percent and BNP Paribas 3.7
percent.
Shares in Royal Bank of Scotland Group jumped by as much
as 15 percent after it reported a first quarter loss of 857
million pounds ($1.29 billion), which was not as bad as
some investors feared. The bank made significant writeoffs
and warned the next two years would be difficult, but still
saw a jump in revenues.
The apparent frankness about the scale of the bank's
difficulties played well in the market, said Keith Bowman,
analyst at Hargreaves Lansdown Stockbrokers.
«Trust is a big feature in the banking sector at the
moment. Anything that reinforces trust is well received,»
he said.
Similarly, Germany's Commerzbank AG rose nearly 4 percent
after it reported a first quarter loss of ¤861 million
($991 million) as it made provisions for bad loans and
investments. However, net interest income, one measure of
revenue, was up 70 percent to ¤1.7 billion from just over
¤1 billion a year earlier.
In Japan, the benchmark Nikkei 225 stock average gained
47.13 points, or 0.5 percent, to 9,432.83, setting a fresh
six-month high. Hong Kong's Hang Seng closed up 171.98
points, or 1 percent, to 17389.87.
South Korea's Kospi climbed 0.8 percent to 1,412.13, while
Shanghai's main index rose 1.1 percent and Australia's
index ended almost flat.
Among stocks, Toyota Motor finished down 1.5 percent
before announcing its worst result ever. The world's
biggest carmaker said it lost a bigger-than-expected 436.94
billion yen ($4.4 billion) in the fiscal year and forecast
more severe losses.
However, financial issues again made big strides, with
Japanese lenders shares particularly strong. Mitsubishi UFJ
Financial Group gained 6.2 percent and Mizuho Financial
Group rose 6 percent in Tokyo.


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