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World stocks gain on stronger US retail sales

KELVIN CHAN, AP Business Writer
Tuesday, 16 Oct 2012 | 5:27 AM ET

HONG KONG -- World stock markets were lifted Tuesday by better data on the U.S. economy and a report showing improving investor confidence in Germany.

In early European trading, Germany's DAX rose 0.6 percent to 7,308.01 and France's CAC 40 gained 0.5 percent to 3,426.48. The FTSE 100 index of leading British companies rose 0.4 percent to 5,831.41.

U.S. stocks were poised to rise. Dow futures edged up 0.1 percent to 13,371. Broader S&P 500 futures added 0.1 percent to 1,437.10.

Stocks rose as Germany's closely watched ZEW monthly investor confidence index rose for the second straight month.

Investors were already encouraged by a U.S. Commerce Department report that showed retail sales rose 1.1 percent in September. August's number was also revised slightly higher to 1.2 percent. The two figures were the biggest since October 2010.

The numbers added to optimism about an economic recovery in the world's biggest economy and helped push up shares of Asia's powerhouse manufacturers, many of which rely on sales to the U.S.

Asian stocks closed higher. Japan's Nikkei 225 index rose 1.4 percent to end at 8,701.31 and South Korea's Kospi climbed 0.8 percent to 1,941.54.

Hong Kong's Hang Seng rose 0.3 percent to 21,207.07. Australia's S&P/ASX 200 gained 0.2 percent to 4,491.50. Benchmarks in Taiwan, Singapore, and New Zealand also rose.

Toshiba Corp. jumped 3.8 percent and Sony Corp. rose 2.4 percent in Tokyo, where exporters were also aided by a slightly weaker yen. In Seoul, Samsung Electronics Co. rose 2.3 percent while automaker Hyundai Motor Co. rose 0.9 percent and its affiliate Kia Motors Corp. jumped 1.4 percent.

The U.S. data, combined with China trade data released on Saturday that showed exports from the world's second-biggest economy rose a relatively robust 9.9 percent, are signs that "economic activities are picking up," said Jackson Wong, a vice president at Tanrich Securities.

"Export-oriented companies would benefit" from stronger U.S. retail sales, he said.

Japan's Softbank Corp. rose 9.6 percent a day after the company, which has investments in Internet and telecom businesses, announced it's buying a controlling stake in Sprint Nextel Corp., the No. 3 U.S. cellphone company, for $20.1 billion.

Mainland China's Shanghai Composite Index ended the day almost unchanged at 2,098.81 after moving between gains and losses. The smaller Shenzhen Composite Index closed 0.3 percent higher at 862.14.

Strategists at Credit Agricole CIB said in a research note that market movements will be capped as investors hesitate ahead of a slate of Chinese economic data expected out later this week, including GDP growth, retail sales and fixed asset investment.

Guo Yanhong, an analyst at Huachuang Securities in Beijing, said the indicators out Thursday could show a further slowdown in China's economy as piecemeal stimulus policies have had limited effect. Analysts don't expect the government to announce any major growth-boosting stimulus measures until China undergoes a once-a-decade leadership transition in November.

"Investors are still expecting a rally after the economy touches bottom in the near future, but it could be difficult. The gloom might stay longer than investors expect," Guo said.

In currencies, the euro strengthened to $1.3001 from $1.2941 in late trading Monday. The dollar rose to 78.83 Japanese yen from 78.70 yen.

Oil prices crept higher. Benchmark crude for November delivery was up 2 cents to $91.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract finished down 1 cent at $91.85 on Monday.

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Researcher Fu Ting in Shanghai contributed to this report.

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