World stock markets rose Tuesday after the U.S. service sector, a mainstay of the world's No. 1 economy, showed growth for the first time in a year and Australia raised interest rates as its recovery strengthens, AP reported. Australia's benchmark index stayed in the green after the country's central bank unexpectedly raised its key interest rate _ the first major economy to increase the cost of borrowing amid signs its recovery from the global slump is gathering momentum. Wall Street broke out of a two week funk Monday after the Institute of Supply Management said its services index rose to 50.9 in September from 48.4 in August. A reading above 50 shows activity is expanding. The index, which tracks more than 80 percent of the country's economic activity, including hospitals, retailers, financial services companies and truckers, hadn't signaled growth since August 2008. U.S. stocks were also boosted by a Goldman Sachs report that talked up the prospects of banks as investors scrounged for any positive news after being jolted by last week's dire report on climbing unemployment. Early in European trading, Britain's FTSE 100 rose 0.9 percent, Germany's DAX gained 0.7 percent and France's CAC 40 advanced 0.6 percent. Stock futures pointed to modest gains Tuesday on Wall Street. Dow futures were up 24, or 0.3 percent, to 9,570. In Japan, the Nikkei 225 stock average rose 17.31, or 0.2 percent, to 9,691.80 and Hong Kong's Hang Seng gained 382.46, or 1.9 percent, to 20,811.53. South Korea's Kospi was down 0.5 percent at 1,598.44. Elsewhere, Singapore's market jumped 1.3 percent and Indonesia's index was up 2 percent. China's markets are closed for a weeklong holiday and reopen Friday. Australia's stock benchmark closed up 0.4 percent despite the central bank's quarter point rate hike making returns on cash and bonds more attractive. In the U.S. Monday, the Dow rose 112.08, or 1.2 percent, to 9,599.75, its first gain in four days. The broader Standard & Poor's 500 index rose 15.25, or 1.5 percent, to 1,040.46, and the Nasdaq composite index rose 20.04, or 1 percent, to 2,068.15.
