Equity markets worldwide edged higher yesterday, lifted by gains in Japanese shares, while mixed performance in US stocks after IBM’s quarterly results disappointed helped keep safe-haven US Treasuries prices steady.

While European technology shares sagged and the IBM results weighed on the Dow, Japan’s Nikkei average surged four per cent, underpinned by news that Japan’s $1.2 trillion public pension would likely more than double its allocation to domestic stocks to about 25 per cent.

IBM’s weakness also helped spur speculation the Federal Reserve may be reluctant to end its massive bond-buying stimulus programme this month.

The S&P 500 and Nasdaq posted modest gains, however.

IBM shares were last down about 7.1 per cent at $169.187. The decline helped support Treasuries prices, which had also risen earlier on views the Fed could delay possible plans to raise interest rates in 2015.

“On a number like that, with the forecast they gave you would expect the broader market would come under more pressure, and maybe it will,” said Ken Polcari, Director of the NYSE floor division at O’Neil Securities in New York, on the IBM results.

The gains in Japanese shares led a rally in Asia and buoyed a measure of worldwide stock market performance.

The Nikkei’s gain yesterday marked its biggest daily rise since June 2013. In addition to the move by Japan’s public pension fund, the index gained on Friday’s strong US consumer sentiment data and a weaker yen.

“This sends a really strong psychological message that the smartest money in Japan, at the pension fund, is willing to take a much more aggressive bet that Japanese equities are moving higher in the future,” said Chris Konstantinos, head of inter­national portfolio management at RiverFront Investment Group in Richmond, Virginia.

MSCI’s all-country world index rose 0.46 per cent, while the FTSEurofirst 300 index of top European shares dropped 0.51 per cent at 1,273.64.

On Wall Street, the Dow Jones industrial average was last down 36.99 points, or 0.23 per cent, to 16,343.42, while the S&P 500 was last up 6.45 points, or 0.34 per cent, to 1,893.21.

The Nasdaq Composite was up 27.39 points, or 0.64 per cent, to 4,285.83.

Benchmark 10-year US Treasury notes were last up 2/32 in price to yield 2.19 per cent. The US dollar index , which tracks the greenback versus a basket of six currencies, rose 0.04 per cent to 85.142.

Brent was last down $1.41, or 1.64 per cent, at $84.75 a barrel. US crude was last down $0.94, or 1.14 per cent, at $81.81 per barrel.

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