World stocks up ahead of ECB meeting
BANGKOK (AP) -- World stock markets rose Thursday ahead of a European Central Bank meeting that analysts anticipate will announce a plan to support financially struggling European countries.
ECB President Mario Draghi is expected to unveil a new bond-buying program intended to bring down the high borrowing costs of Spain and Italy. Without some way to reduce the interest rates on the bonds they sell, the two nations could be pushed into asking for a bailout, following a path taken by Greece, Ireland, Portugal and Cyprus.
"It won't save Europe but it will keep Spanish yields and Italian yields down for now and give Europe's leaders another 3-6 months to come up with bigger and better plans for a real solution," said analysts at DBS Bank Ltd. in Singapore.
European stocks rose in early trading. Britain's FTSE 100 added 0.7 percent to 5,699.46. Germany's DAX jumped 1.4 percent to 7,061.32 and France's CAC-40 gained 1.2 percent to 3,445.30. Wall Street also appeared set for gains, with Dow Jones industrial futures 0.6 percent higher at 13,122 and S&P 500 futures rising 0.6 percent to 1,412.20.
Analysts also expressed skepticism about whether an ECB move would sufficient to resolve the debt crisis affecting the 17 nations that use the euro when the world's major economies are suffering sluggish growth.
"I do think reality is setting in, that there is only so much the ECB can do. At the end of the day, the macro data doesn't look great. So there's probably an inclination for the markets to drift until a lead comes in from the macro side," said Lorraine Tan, director at Standard & Poor's equity research in Singapore.
She said she didn't expect a big improvement in key economic data until the fourth quarter of 2012.
"If China starts to show better numbers that will make an impact. But we really don't expect to see too much change in the numbers until September data rolls around."
Earlier in the day, stock markets in Asia wavered before posting modest gains.
Japan's Nikkei 225 closed marginally higher at 8,680.57. Hong Kong's Hang Seng added 0.3 percent to 19,209.30. South Korea's Kospi gained 0.4 percent to 1,881.24, boosted by tech shares. Australia's S&P/ASX 200 rose 0.8 percent to 4,312.90.
Mainland China's Shanghai Composite Index rose 0.7 percent to 2,051.92 while the smaller Shenzhen Composite Index added 1 percent to 859.30.
South Korean technology giant Samsung Electronics rose 0.6 percent after saying sales of its Galaxy S3 smartphones had topped the 20 million mark since its release in late May. LG Electronics added 1.4 percent.
Benchmark oil for October delivery was up $1.09 to $96.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 6 cents to finish at $95.36 per barrel on the Nymex on Tuesday.
In currencies, the euro rose to $1.2617 from $1.2599 late Wednesday in New York. The dollar rose marginally to 78.42 yen from 78.41 yen.