World shares jumped Friday, shrugging off stubbornly high oil prices after signs that U.S. companies are hiring more workers boosted Wall Street.
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| Specialist Frank Masiello, left, talks with trader James Riley on the floor of the New York Stock Exchange Thursday, March 3, 2011. (AP Photo/Richard Drew) |
Oil prices rose to near $103 a barrel as Libyan government and rebel forces dug in amid fierce fighting, raising investor fears of protracted oil output cuts in the OPEC nation. The dollar rose against the yen but slipped against the euro.
European shares rose in early trading following strong gains in Asia. Britain\'s FTSE 100 was up 0.3 percent to 6,022.93. Germany\'s DAX was 0.6 percent higher to 7,265.57, and the CAC-40 in Paris was up 0.3 percent to 4,072.47. Wall Street, however, appeared set to lose some momentum. The Dow Jones industrial futures stood at 12,240 and S&P 500 futures lingered at 1,328 — both essentially flat.
The Nikkei 225 stock average, Japan\'s main benchmark, climbed 1 percent to close at 10,693.66, with a weakening yen helping major exporters like Canon Inc., up 1.8 percent, and Toyota Motor Corp., up 1.2 percent.
South Korea\'s Kospi jumped 1.7 percent to 2,004.68. Advancing shares include flagship carrier Korean Air Lines Co. Ltd., up 1 percent, and Asiana Airlines Inc., up 2.9 percent.
Australia\'s S&P/ASX 200 rose 1.2 percent to 4,864.30, while benchmarks in Singapore, Taiwan, New Zealand and Indonesia also were up.
Hong Kong\'s Hang Seng added 1.2 percent to 23,408.86, although trading was light, with investors taking a wait-and-see approach ahead of the National People\'s Congress, which opens Saturday in Beijing. During the annual session, China\'s legislature is expected to outline the country\'s social and economic goals for the next five years.
"We expect the Chinese government will indicate that inflation is priority No. 1," said Jackson Wong, vice president at Tanrich Securities in Hong Kong. "Investors are worried about strong administrative action from the Chinese government to curb inflation, although I doubt it."
Shanghai\'s Composite Index ended the week at its highest level so far this year, gaining 1.4 percent to 2,942.31 on heavy buying across the board. The Shenzhen Composite Index of China\'s smaller, second exchange rose 1.1 percent to 1,286.22.
The rally suggests investors believe regulators have gotten inflation under control, forestalling the need for more credit tightening measures, analysts said.
"The consumer price index is due by the end of next week and while it might not meet earlier speculation that it will fall below 4 percent, it will probably show there is no need for any big policy moves," said Peng Yunliang, an analyst at Shanghai Securities, in Shanghai.
Markets have struggled to regain their calm following weeks of turmoil in the Arab world, where popular revolts in Tunisia and Egypt recently brought down long-standing authoritarian regimes. Libya may be the next domino, with a violent rebellion there aimed at overthrowing Moammar Gadhafi that has sent oil prices to their highest levels in about two years.
Analysts are worried that sustained oil prices above $100 would eventually threaten global economic growth. Wong said he expects oil prices to remain high.
"We do expect oil prices to drop below ($100) if Middle East tensions are resolved. However, if the world economy is recovering, especially in the U.S. and Europe, that would drive demand for oil higher. And also Chinese demand is constantly high. So oil prices are very unlikely to drop further," Wong said.
Asia\'s upswing came on the heels of a strong showing by shares on Wall Street, where the Dow Jones industrial average rose 1.6 percent to 12,258.20 — its biggest gain since Dec. 1. The Standard & Poor\'s 500 index climbed 1.7 percent to 1,330.97. The Nasdaq composite index gained 1.8 percent to 2,798.74.
In a positive sign for the economy there, the Labor Department said first-time claims for unemployment benefits fell to their lowest level since May 2008. Economists had expected the number to rise.
Separately, the Institute for Supply Management said its measure of hiring by service companies rose to the highest level since April 2006. The index covers a broad range of industries including retail, health care and financial services.
The signs of jobs growth followed a report Wednesday that private employers added far more jobs than analysts had expected last month. Those gains are raising hopes that Friday\'s jobs report from the Labor Department will show that the unemployment rate fell from its current level of 9 percent.
Benchmark crude for April delivery was up 92 cents at $102.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents to settle at $101.91 on Thursday.
In currencies, the dollar rose to 82.42 yen from 82.31 yen late Thursday while the euro slipped to $1.3958 from $1.3960.
