World Markets Close Mostly Higher on US Rally

The optimism that saw U.S. stocks rise for five straight days last week for the first time since July 2007, has all but evaporated amid renewed worries about the global economy. The data expected out of the U.S. over the rest of the week, including Friday's closely watched jobs report for November, are expected to make for further grim reading.

Japanese men make their way past an electric market board in central Tokyo, Tuesday, Dec. 2, 2008....

Japanese men make their way past an electric market board in central Tokyo, Tuesday, Dec. 2, 2008. Japan's Nikkei stock index tumbled more than 5 percent in early trade Tuesday following massive losses on Wall Street amid growing gloom over the global economy. (AP Photo/Katsumi Kasahara)

(AP)

Despite the recession which has taken hold across the developed world, some companies are managing to post solid performances. One notable example was British supermarkets chain Tesco PLC, which saw its share price rise Tuesday by over 13 percent after it reported like-for-like sales, excluding revenues from its gas pumps, up 2 percent during the third quarter.

"Yet again Tesco has defied the laws of gravity, kicking market recession fears firmly in the teeth," said Howard Wheeldon, senior strategist at BGC Partners.

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Tesco will be hoping that the widely anticipated 1 percentage point rate reduction Thursday from the Bank of England will help entice shoppers in the crucial Christmas season. The European Central Bank is also expected to cut its benchmark rate by at least half a percentage point on Thursday.

Latin American shares closed mostly higher as bargain hunters swooped in a day after stocks were dragged down by the selloff on Wall Street.

Brazil's Ibovespa stock index was up 0.8 percent to close at 35,001, while Mexico's IPC rose by 269 points, or 1.4 percent, to 19,802, Colombia's IGBC edged up 0.8 percent to 7,232 and Argentina's Merval index jumped 2.9 percent to 952.

Chile's IPSA index was the exception, dipping 0.7 percent to close at 2,318.

Earlier, Australia's central bank slashed its key interest rate Monday a full percentage point to 4.25 percent in an attempt to prevent the economy from sliding into recession. But investors took scant comfort from the move, sending the benchmark S&P/ASX 200 index down 4.2 percent to 3,528.2.

Benchmarks in the Philippines, Taiwan, India and South Korea also dropped sharply.