World markets rose Tuesday as investors fed on a pledge by the world's 20 biggest economies to underwrite the global recovery with stimulus efforts.
Europe followed Asia higher after stocks in Australia jumped nearly two per cent amid news business confidence had reached a near six-year high and Japanese shares shrugged off weak economic data. Oil prices rose above $69 US a barrel ahead of Wednesday's OPEC meeting.
With Wall Street and Bay Street closed for a holiday Monday, markets continued to lap up the weekend announcements from finance officials at the Group of 20 summit in London that boosted European and Asian shares on Monday.
The officials welcomed improvements in economic growth but warned recovery was not sustainable without continued government help in the form of deficit spending, low interest rates and efforts to expand the money supply.
"I don't know if the optimism is justified but people are buying into it," said Francis Lun, general manager at Fulbright Securities Ltd in Hong Kong.
"The G20 countries said they would continue to flood the system with liquidity so the economy doesn't tank. That's what investors wanted to hear. Investors always want to believe the good news and disregard the bad news," he said.
Export weakness
As trading got underway in Europe, Britain's FTSE 100 was up 0.8 per cent, Germany's DAX gained 0.5 per cent and France's CAC 40 rose 0.4 per cent.
Japan's Nikkei 225 stock average advanced 72.29 points, or 0.7 per cent, at 10,393.23 despite a steep fall in the nation's current account surplus underlining prolonged weakness in exports — a key driver of growth for the world's No. 2 economy.
Hong Kong's Hang Seng gained 440.50, or 2.1 per cent, to 21,069.81 while South Korea's Kospi was up 0.7 per cent at 1,619.69.
Australia's benchmark jumped 1.6 per cent as a monthly survey showed business confidence in August at its highest level in nearly six years. China's Shanghai index gained 1.7 per cent and Taiwan's benchmark rose 1.2 per cent.
In Tokyo trade, the world's biggest automaker Toyota Motor Corp. fell 0.3 per cent despite announcing it is hiring 800 contract workers in Japan to keep up with brisk sales of its Prius gas-electric hybrid car.
Stock futures pointed to gains on Wall Street when trading resumes Tuesday. Dow futures rose 102 points, or 1.1 per cent, to 9,519 and S&P futures added 11.80, or 1.2 per cent, to 1,025.70.
