Markets rise as Alcoa sees stronger demand
- Article by: CARLO PIOVANO
- Associated Press
- January 9, 2013 - 5:50 AM
LONDON - World stock markets rose Wednesday after the fourth-quarter earnings season got off to a positive start in the U.S. with aluminum giant Alcoa forecasting higher demand for 2013.
Demand for aluminum has been hurt by the weak global economy, but Alcoa predicted a 7 percent increase in demand this year, slightly better than the 6 percent increase in 2012. Because Alcoa supplies so many key industries, investors study its results for clues about the health and direction of the overall economy.
"Regional markets are mostly firmer after the Alcoa result set the tone early in Asia," said Stan Shamu of IG Markets in Melbourne in a market commentary. "Alcoa's results are generally considered a bellwether for the global economy and the fact that the aluminum giant forecasts higher demand in 2013 appeased investors."
European stocks edged up in early trading. Britain's FTSE 100 rose 0.3 percent to 6,073.32 while France's CAC-40 rose almost 0.1 percent to 3,707.28.
Germany's DAX was only flat, at 7,699.18, after official figures showed industrial production rose less than expected in November. The 0.2 percent gain was also not enough to offset a 2 percent fall the previous month and means German economic output overall likely fell in the fourth quarter.
"The figures provide further strong evidence that the eurozone's economic weakness has spread right into the core," said Jonathan Loynes, chief European economist at Capital Economics.
Investors will look forward to a monetary policy meeting by the European Central Bank on Thursday for clues on whether the weakening economic outlook is likely to trigger an interest rate cut in the coming months.
On Wall Street, stocks appeared headed for gains. Dow Jones industrial futures were up 0.1 percent at 13,278 and S&P 500 futures rose almost 0.1 percent to 1,452.60. U.S. markets were closed by the time Alcoa reported its results.
In Asia, Hong Kong's Hang Seng advanced 0.5 percent to 23,218.47 after a downturn in the prior session, with sentiment helped by gains in mainland Chinese shares.
"Stability in China is helping. We are taking a lot of cues from China-Asia," said Jackson Wong, vice president of Tanrich Securities in Hong Kong.
Japan's Nikkei 225 index opened lower on a strengthening yen but reversed course as the currency slipped against the dollar. The benchmark in Tokyo gained 0.7 percent to close at 10,578.57.
Australia's S&P/ASX 200 added 0.4 percent to 4,708.10. South Korea's Kopsi was 0.3 percent lower at 1,991.20. Benchmarks in Singapore, Taiwan, Thailand, and the Philippines rose. Indonesia and Malaysia fell. Mainland Chinese stocks were mixed.
Major indexes surged last week after U.S. lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the fiscal cliff. The deal, however, remains incomplete, and trading has been cautious since then. Politicians will face another deadline in two months to agree on more spending cuts.
In commodity markets, the benchmark crude oil contract for February delivery was down 11 cents to $93.04 per barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro fell 0.2 percent to $1.3057 while the dollar rose against the Japanese yen, to 87.46 yen from 87.19 yen.
Pamela Sampson in Bangkok contributed to this report.
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