Stocks mostly higher as Syria strike fears fade
AP and AFPLONDON/HONG KONG--Stock markets mostly advanced Tuesday thanks to an increase in corporate deal-making and fading likelihood of an imminent U.S.-led attack against Syria. European shares underperformed, however, a day after posting strong gains.
September 4, 2013, 2:20 am TWN
U.S. President Barack Obama has faced difficulty trying to amass support for U.S. military intervention in Syria, where an alleged chemical attack by government forces killed scores of civilians outside of Damascus. Britain's parliament voted against involvement, and Russia and China have been critical of the idea.
Obama announced over the weekend that he would seek approval from Congress for military strikes, but he faced skepticism among many U.S. lawmakers about the intelligence regarding the chemical attack and the value of an intervention to United States interests.
After surging the day before, European markets were steady or slightly lower. Britain's FTSE 100 was down 0.2 percent to 6,489.83, while Germany's DAX fell 0.6 percent to 8,195.56. France's CAC-40 shed 0.6 percent to 3,983.60.
Sentiment has been shored up by an increase in corporate deal-making, which shows confidence in the global economy is recovering. After Verizon agreed Monday to buy out the remaining stake in its mobile phone business from Vodafone in a massive, US$130 billion deal, Microsoft announced it would take over Nokia's phone unit.
Nokia shares were up almost 40 percent in Helsinki on the news that Microsoft will pay US$7.2 billion to buy the Finnish company's business, which had until recently been the biggest seller of mobile phones in the world.
Wall Street was headed for gains after a three-day holiday weekend. Dow Jones industrial futures advanced 0.6 percent to 14,885 while S&P 500 futures rose 0.8 percent to 1,644.50.
In Asia, shares Tuesday extended their gains and the dollar pushed back towards 100 yen after strong manufacturing data in China and Europe pointed to an uptick in the global economy.
Stocks in several emerging economies also enjoyed small rises after a painful August that saw a huge global sell-off, while easing fears of an imminent strike on Syria helped push oil prices down further.
Tokyo surged 2.99 percent, or 405.52 points, to close at 13,978.44 as the yen weakened against the dollar, while Hong Kong added 0.99 percent, or 219.24 points, to end at 22,394.58.
Sydney closed 0.16 percent higher, adding 8.3 points, to 5,196.6 and Seoul rose 0.46 percent, or 8.93 points, to finish at 1,933.74. Shanghai was up 1.18 percent, or 24.66 points, at 2,123.11.
But Mumbai crashed 3.45 percent or 651 points to close at 18,234.66 in another major sell-off spurred by a gloomy economic forecast by Goldman Sachs.
September trade started strongly in Asia Monday after weekend figures showed China's official purchasing managers index (PMI) of manufacturing activity came in at a 16-month high in August.
The European PMI also follows recent data that have raised hopes the region's drawn-out recession may be in the past.
But as the Asian markets closed Tuesday the Organization for Economic Cooperation and Development trimmed its growth forecasts for China and the US, warning that lasting recovery was still not firmly on its feet.