Stocks rise on US data, central bank hopes

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Associated Press

Posted on May 27, 2014 at 12:02 AM

Updated Tuesday, May 27 at 9:40 AM

LONDON (AP) — Stock markets rose Tuesday on upbeat U.S. economic data and hopes for monetary stimulus in Europe. Asian markets were more subdued, however, as tensions flared between China and Vietnam over a territorial dispute.

Germany's DAX rose 0.4 percent to 9,934.15, extending the previous day's gains that were sparked by European Central Bank President Mario Draghi suggesting further stimulus may be offered to fend off growth-sapping deflation.

France's CAC 40 was up 0.1 percent at 4,531.98 while Britain's FTSE 100, which was closed for a holiday on Monday, gained 0.5 percent to 6,850.48.

U.S. shares also had a strong start after the Memorial Day holiday and as new figures showed orders for big-ticket items rose unexpectedly last month. The Dow was up 0.5 percent at 16,683.46 while the S&P 500 gained 0.6 percent to 1,911.02. The S&P 500 finished last week above 1,900 for the first time.

Markets are keeping a wary eye on developments in Ukraine after Sunday's presidential elections. Russia's acceptance of billionaire businessman Petro Poroshenko as Ukrainian president had raised hopes for an easing of tensions. But hours after he was declared the victor, pro-Russian rebels escalated the Ukrainian conflict by occupying a major airport in the country's east and Kiev retaliated with an air strike.

In Asia, shares were mixed after Vietnamese state media reported that a Chinese fishing vessel rammed and sank a Vietnamese fishing boat in the South China Sea, where the countries have overlapping territorial claims. Tensions rocketed this month after China sent an oil rig into seas near disputed islands.

Tokyo's Nikkei 225 closed up 0.2 percent at 14,636.52 after surging earlier in the day to its highest level since early April.

The release of data Tuesday showing resilient business conditions and rising producer prices, and the yen's steadiness against the dollar, raised confidence in Japan's economic recovery.

South Korea's Kospi fell 0.6 percent to 1,997.63 and Hong Kong's Hang Seng index slipped 0.1 percent to 22,944.30. Shares gained in Taiwan and Malaysia but fell in Australia, New Zealand, Singapore and Shanghai.

In other markets, the euro fell 0.1 percent to $1.3626 and the dollar gained 0.2 percent to 102.09 yen.

In energy markets, benchmark crude for July delivery was down 26 cents to $104.10 in electronic trading on the New York Mercantile Exchange.

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