European markets rallyComment on this story
European stock markets rallied Friday on hopes that the European Central Bank is getting ready give relief to European countries struggling with high borrowing costs by buying up their bonds.
In France, the CAC-40 rose 0.4 percent to 3,394, while Germany's DAX was up the same rate to 6,925 in afternoon trading. The FTSE index of British shares gained 0.2 percent to 5,731.
The euro shot up past $1.26 at one point for the first time in over a month; by late afternoon, it was at $1.2573.
Stocks have mostly languished this week, as investors waited to hear from Federal Reserve Chairman Ben Bernanke, who will give a speech Friday that could provide insight into whether the central bank is considering a new stimulus for the US economy.
Hopes for a boost from the Fed took a blow this week when the central bank's “Beige Book” survey of the economy struck some positive notes.
But Friday afternoon, with only a few hours left to go until the speech, investors suddenly jumped off the sidelines. They appeared to be trained on news in Europe, rather than the US.
Eurostat said that the unemployment rate had remained unchanged in July - at 11.3 percent. While that's a record high, the fact that it did not worsen could be construed as good news.
In addition, at a conference of business leaders outside Paris, Benoit Coeure, a member of the ECB's executive board, reiterated that the bank is working on a bond-buying plan.
While the broad strokes of the plan have been known for some time, just the mention of it spurred markets.
“The reason behind lowly eurozone data is already understood,” said Andrew WIkinson, chief economic strategist at Miller Tabak. “The region has had its temper tantrum: Governments have promised not only to step up their responses to years of overzealous spending but also to do more to tackle the crisis. . The case has been turned over the ECB, which appears braced to act by intervening when necessary.”
Wall Street was more cautious - and probably more focused on expectations there will be no sign of stimulus when Bernanke speaks. The Dow Jones industrial average rose 0.3 percent in early trading to 12,037, while the broader Standard & Poor's index was flat at 1,399.
“The Federal Reserve symposium at Jackson Hole is widely expected to disappoint,” said DBS Group in a report. “The Fed has scope to continue its wait-and-see approach, and keep open the door for action if needed.”
Earlier, in Asia, Tokyo's Nikkei 225, shed 1.6 percent to 8,839.91 points. China's benchmark Shanghai Composite Index was off 0.3 percent at 2,047.52 and Hong Kong's Hang Seng declined 0.4
percent to 19,482.57.
Seoul's Kospi index shed 0.1 percent to 1,905.12 and Sydney's ASX/S&P 200 ended unchanged at 4,316. Taiwan's Taiex rose 0.4
percent to 7,397.06.
India's Sensex fell 1 percent to 17,363.29 after the government reported disappointing growth of 5.5 percent for the second quarter of the year, compared to 8 percent from a year earlier.
South Korea reported July industrial production growth slowed more abruptly than expected, falling to 0.3 percent over a year earlier from June's 1.4 percent.
The rally in Europe rubbed off on oil prices. Benchmark oil for October delivery rose $1.33 to $95.95 per barrel in electronic trading on the New York Mercantile Exchange. - Sapa-AP