World stock markets post gains after reports show U.S. economy growing modestly

BANGKOK – Good news about the U.S. economy, including strong auto sales, helped boost world stock markets Thursday.

A Federal Reserve survey released Wednesday showed all U.S. regions reported moderate economic growth from July through late August. More good news came from the auto industry: General Motors and other carmakers posted strong sales in August, giving the industry its best month in six years.

That data comes on top of the Institute for Supply Management’s report, released Tuesday, that said U.S. factory production rose in August at the fastest pace in two years.

In early European trading, Britain’s FTSE 100 rose 0.8 per cent to 6,527.41. Germany’s DAX advanced 0.4 per cent to 8,227.41. France’s CAC-40 rose 0.4 per cent to 3,997.22.

Wall Street look set for a modestly higher open, with Dow Jones industrial futures up slightly at 14,927. S&P 500 futures were also up marginally to 1,653.80.

Japan’s Nikkei 225 index swung between losses and gains before closing 0.1 per cent higher at 14,064.82 after the Bank of Japan said following a policy meeting that the world’s No. 3 economy was “recovering moderately.” The central bank’s policy board also said the bank’s monetary easing policies would be maintained for the time being, Kyodo News reported.

India’s Sensex benchmark surged 1.7 per cent a day after the country’s new central bank head, Raghuram Rajan, announced a series of measures aimed at shoring up the rupee currency and strengthening the banking system.

Among new measures Rajan promised was one to allow existing banks to open new domestic branches without Reserve Bank of India permission. Rajan also said long-awaited new banking licenses would be issued by January. Shares of State Bank of India jumped 8 per cent in Mumbai. Axis Bank Ltd. surged more than 15 per cent.

Hong Kong’s Hang Seng gained 1.2 per cent to 22,597.97. South Korea’s Kospi advanced 1 per cent to 1,951.65. Benchmarks in Singapore, Taiwan and Thailand. Mainland Chinese shares were mixed. The Philippines and Indonesia fell. Australia’s S&P/ASX 200 fell 0.4 per cent to close at 5,142.50.

Investors were also looking ahead to Friday, when the U.S. jobs report for August will be released. Economists expect that the U.S. created 177,000 jobs last month and that the unemployment rate held steady at 7.4 per cent, according to financial data provider FactSet.

Friday’s jobs report is the last major piece of economic data the Federal Reserve will have to work with before the central bank decides whether or not to pull back on its massive bond-buying program. That program has kept interest rates abnormally low. While most investors believe the Fed will begin to pull back, the question has become when and how much.

“The economy seems to be recovering. I think the crucial thing will be the jobs numbers on Friday,” said Andrew Sullivan, trader at Kim Eng Securities in Hong Kong.

Benchmark crude for October delivery was up 60 cents at $107.82 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.31 to close at $107.23 a barrel on Wednesday.

In currencies, the euro fell to $1.3190 from $1.3199 late Tuesday. The dollar rose to 99.91 yen from 99.76 yen.


Follow Pamela Sampson on Twitter at