Market recovery persists on global economy hopes

Many stock indexes are back where they were at the start of the week before the messy Italian election results, which reignited concerns over the country's appetite for further austerity and Europe's debt crisis as a whole.

In fact, the main U.S. equity markets closed at 5-year highs Wednesday and there are indications that the Dow Jones industrial average will make another attempt Thursday toward its all-time record.

Positive economic data, particularly out of the U.S., combined with indications from the Federal Reserve Chairman Ben Bernanke that the central bank isn't going to change its super-easy monetary policy any time soon to shore up markets following the Italian election rout.

“Although February isn't going to stand out in traders' minds the same way that January did, it's certainly shaping up to be a robust end to the month,” said Fawad Razaqzada, market strategist at GFT Markets. “Bernanke's two-day testimony has been well-timed and the continued commitment to stimulus measures — specifically to support housing, autos and other parts of the economy — has given the bulls a new lease of life.”

In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,340 while Germany's DAX rose 0.5 percent to 7,711. The CAC-40 in France was 0.3 percent higher at 3,701.

Italian shares underperformed as investors remained concerned about the ability of political leaders to cobble together a government that will enact further economic reforms and tight budgetary controls. The FTSE MIB index in Milan was down 0.3 percent at 15,784.

Wall Street was poised for a solid opening, with both Dow futures and the broader S&P 500 futures up 0.1 percent.

How the U.S. session actually maps out could well hinge on whether the unexpected 0.1 percent annualized fourth-quarter contraction in the U.S. economy is revised.

Unlike the end of 2012, when investors were concerned about the upcoming fiscal cliff, investors appear sanguine over the risks associated with planned spending cuts that are due to take effect at the start of March as part of a previous budget agreement between the White House and Congress. The planned “sequester” could hit U.S. growth if no deal is reached to avoid it. Previous experience, however, suggests a last-minute deal will be cobbled together.

Asian markets rose Thursday after the Dow on Wall Street hit a more than five-year high, while the head of the European Central Bank soothed concerns over the eurozone.

A strong bond sale in Italy also helped the euro despite uncertainty after weekend polls, while the yen resumed its downward trend after Japan's government nominated a fan of aggressive easing as the new central bank governor.

Tokyo climbed 2.71 percent, or 305.39 points, to 11,559.36 as the yen sank on confirmation that Japan's government had put forward Haruhiko Kuroda to take over at the Bank of Japan.

Kuroda, the current Asian Development Bank chief, is known as an advocate of a looser monetary policy to overcome slow growth, in line with the views of Prime Minister Shinzo Abe.

The dollar bought 92.36 yen, compared with 92.16 yen in New York late Wednesday.

Sydney added 1.34 percent, or 67.5 points, to end at 5,104.1 and Seoul rose 1.12 percent, or 22.45 points, to 2,026.49.

Hong Kong shares advanced 1.96 percent, or 443.26 points, to 23,020.27 and Shanghai jumped 2.26 percent, or 52.37 points, to 2,365.59.

Gold was at US$1,591.00 at 1035 GMT compared with US$1,608.32 late Wednesday.

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