Japan leads Asian stocks higher after US rebound

AP and AFP

HONG KONG–Asian stock markets rose Monday, led by a 4 percent surge in Japan, after Wall Street’s rebound eased nerves about the outlook for the world economy and investors looked ahead to a report on China’s economic growth. European shares wilted amid gloom about prospects for the region’s economy.

Markets faded in Europe with Britain’s FTSE 100 down 0.5 percent at 6,280.71. Germany’s DAX dropped 1 percent to 8,767.14. But futures augured gains on Wall Street. Dow and S&P 500 futures were both up 0.3 percent.

��After a sharp pullback recently, investors appear to be regaining confidence that we may have seen a bottom for now,�� said IG strategist Stan Shamu. ��Sentiment is vastly improved from the carnage we saw last week and some positives are beginning to emerge.��

Investors took their lead from Wall Street, where the three main indexes saw healthy advances Friday on bargain-buying and following upbeat earnings reports from General Electric and Morgan Stanley. The Dow advanced 263.17 points, or 1.6 percent, to 16,380.41, its second-best day of the year. The Standard & Poor’s 500 rose 24 points, or 1.3 percent, to 1,886.76 and the Nasdaq composite rose 41.05 points, or 1 percent, to 4,258.44.

Adding to buying sentiment were comments from officials at the U.S. and British central banks. On Thursday James Bullard, head of the St Louis branch of the Federal Reserve, suggested it could extend its bond-buying program rather than winding it down, as had been expected. And on Friday Bank of England chief economist Andrew Haldane said recent economic weakness implied the need for a slower approach to raising rates. The two banks have in the past few months been considering raising interest rates as their respective economies have slowly been picking up. However that has spooked traders as other economies, including the eurozone, China and Japan, have been struggling. Asian markets rallied Monday. However, while the gains will come as some relief after the ups and downs of last week, traders are nervously watching the release of Chinese economic growth data later in the week for fear of another weak figure.