Most World Equity Markets Rise
MARKETSCOPE: Japanese share prices gained on Monday as investors took hope following Prime Minister Junichiro Koizumi's victory in Sunday elections.
Meanwhile most other shares around the world rose on company or macroeconomic news, but election worries hit Germany.
Japan's two major stock indices rallied to four-year highs as Prime Minister Junichiro Koizumi won Sunday's general election by a landslide. The Nikkei 225 rallied 204.39 pts (1.61%) to 12,896.43. The market was also boosted by Japan's 0.8% growth in second quarter Gross Domestic Product. The broad-based TOPIX index jumped 16.45 points, or 1.27%, to 1309.8. Advancing issues dwarfed declining issues by 1160 to 373. Volume fell from a record-high level Friday. Banking stocks led the market's advance, topped by Mizuho Financial and Sumitomo Mitsui.
Stocks in Hong Kong also rose, as gains on Wall Street Friday and strong property sales locally over the weekend boosted sentiment. Market gains were capped by caution due to uncertainty over the U.S. Federal Reserve's rate policy course. In Seoul, the KOSPI index climbed to an all-time high, aided by oil price weakness and strength on Wall Street. Brokerages extended recent gains on speculation that stock market strength will drive higher volumes and boost earnings. The chipmaker Hynix Semiconductor jumped 6.5%.
Germany fared worse than its Asian counterparts. The DAX Index fell 15.95 to 4989.98, as polls showed German Chancellor Schroeder rebounding in polls against his rival the opposition leader Angela Merkel ahead of next week's national elections. The political news damaged the market's hopes for structural German reform. 18 DAX stocks fell and 11 rose on turnover of 95,616,,194 shares. Nonetheless, lower oil prices kept the market from falling apart. Among major shares, Volkswagen rose on a published report that the carmaker may cut as many as 30,000 positions. Hannover Re fell after Standard & Poor's said it may cut its credit-rating outlook for the reinsurance industry if losses from Hurricane Katrina surpass $50 billion. OHB Technology rose after winning a contract for the Ariane 5 space program.
In London, the Financial Times-Stock Exchange 100 index rose 15.80 points to the 5375.51 level, even though UK Producer output prices rose 0.3% in August after gaining 0.8 percent in July. At the same time, UK August Producer Price Index input prices rose just 0.2%. 63 FTSE stocks rose and 38 fell on turnover of 438,697,466 shares. Among major shares, WPP rose after Morgan Stanley upgraded the company's shares to "overweight" from "equal-weight". Aero Inventory rose after the company said its full year earnings rose fivefold. Bovis Homes fell as the company said its first half profit slid.
French shares were little changed. The CAC 40 rose 0.14 to 4491.82. Twenty-four CAC stocks rose and 12 fell on turnover of 97,723,232 shares. Among major companies, Assurances Generales de France rose after Allianz agreed to an acquisition deal. Havas fell as Lehman cut its recommendation on the stock to "underweight" from "equal weight". Alcatal rose after the company forecast higher fiscal year earnings.