Global stocks mostly higher

Global stock markets were mostly higher yesterday, posting solid gains after encouraging US economic data helped offset deep concerns that Europe's debt and deficit crisis would sap growth.

In Europe, several markets were up more than two per cent at one stage, before falling back on the hesitant Wall Street showing.

In London, the benchmark FTSE 100 index of leading shares closed up 1.16 per cent at 5,211.18 points. In Paris, the CAC 40 rose 1.59 per cent to 3,557.34 points and in Frankfurt the DAX put on 1.23 per cent at 6,054.03 points.

"Investors appear to be welcoming the positive vibe with open arms, hoping that the economic recovery is picking up speed," said analyst Ben Potter at financial spread-betting firm IG Index.

"For the time being, an air of opportunism does seem to be washing over the market with equities looking a little on the cheap side," Potter said.

Dealers said Asian and European markets did well on the back of Wall Street's 2.25 per cent gain on Wednesday but early New York trade yesterday was muted as investors there consolidated the advance.

They said strong US home and auto sales figures had bolstered hopes that the US economy was on track after recent fears that the recovery could be slowing after sharp gains in 2009.

News that the key US service sector grew for the fifth consecutive month in May added to the positive tone yesterday but then markets came off a bit as investors waited for crucial US new job figures due today.

Analysts are forecasting the US economy will show a gain of 500,000 or more jobs in May, up from 290,000 in April.

On Wall Street, the blue-chip Dow Jones Industrial Average opened firmer, adding more than 0.50 per cent but then slipped back on mixed data to trade down 0.21 per cent at around 1615 GMT. The tech-rich Nasdaq Composite was up 0.31 per cent.

US stocks and other markets did well on Wednesday after strong pending home and vehicle sales, Charles Schwab & Co. analysts said in a note, "but today's economic data and retailer same-store sales are coming in mixed".

Payrolls firm ADP reported 55,000 jobs were created in the private sector in May for a fourth consecutive month of increases, but the figure missed analyst forecasts for 60,000 new jobs.

New jobless claims fell meanwhile but by less-than-expected, suggesting that the labour market remains under pressure.

"Claims are now closer to where they were prior to the mid-May surge and show a labour market that is not healing quickly," said Andrew Gledhill with Moody's Economy.com.

In Asian trade, Tokyo jumped 3.24 per cent and Hong Kong gained 1.62 per cent as bargain hunters came into the market.

"Market participants were finally able to breathe a sigh of relief on Wednesday," said strategist Joel Kruger at currency trading website DailyFX.

"While the oversold nature of the markets was enough of a reason to want to be buying back into equities, currencies, and commodities, it seems as though a solid round of data out of the US, a lack of any additional concerning news out from the eurozone, and subdued geopolitical risk, all helped."