Global stock rally continues ahead of G-20 summit

The rally in world stock markets continued Friday as confidence remained buoyed by some signs of a stabilization in U.S. consumer spending and hopes of fresh stimulus packages in China and Japan.

Positive comments from Bank of America Corp.'s chief executive Ken Lewis also helped sustain the market optimism that was stoked earlier this week by buoyant comments from Citigroup Inc.'s CEO Vikram Pandit.

The FTSE 100 index of leading British shares was up 62.70 points, or 1.7%, at 3,774.76, while Germany's DAX rose 36.85 points, or 0.9%, to 3,993.07. France's CAC-40 was up 42.72 points, or 1.6%, to 2,736.97.

Earlier in Asia, Japan's Nikkei 225 stock average jumped 371.03 points, or 5.2%, to 7,569.28, and Hong Kong's Hang Seng climbed 524.27 points, or 4.4%, to 12,525.80.

Markets have responded positively to a raft of fairly good news this week, not least Thursday's U.S. retail sales data, which were not as bad as feared despite massive increases in the number of unemployed.

"In a world where we have all learned to fear and forecast the worst, a glimmer of good news is all it takes to change the mood," said Kit Juckes, head of credit research and market strategy at Royal Bank of Scotland.

Earlier comments from Chinese Premier Wen Jiabao and Japan's Prime Minister Taro Aso — that their governments stood ready to roll out even more measures if needed to reinvigorate growth — sustained the rally into the Asia session.

The mood has been notably different this week than at any time since the financial crisis became most acute last October, with the Dow Jones industrial average up around 10% and the FTSE 100 index around 7% higher.

However, investors are wary of calling the end to the bear market and remain on guard for any news that may knock the stuffing out of the buyers. A failure by the G-20 finance ministers and central bankers to provide a united front at this weekend's meeting in southern England could be one catalyst for a renewed bout of selling pressure.

Europe — excluding Britain — and the U.S. appear to be at loggerheads about the best way to get the global economy back on track and specifically about the merits of another big fiscal boost.

While U.S. Treasury Secretary Tim Geithner appears to be focusing on the need for another fiscal stimulus, most of Europe's leaders think the top topic of conversation ahead of the April 2 meeting of G-20 leaders should be big reforms to the international financial regulatory system and specifically the role of the International Monetary Fund.

For now, though, the rally is expected to continue into the U.S. session, though there is some economic data, notably on U.S. consumer confidence that could spark an end-of-week bout of selling. Dow futures were up 36 points, or 0.5%, at 7,152 while the broader Standard & Poor's 500 futures rose 5 points, or 0.7%, to 753.40.

"Although it is fair to say there is still a high degree of nervousness around this recovery, with many traders feeling it is a question of when and not if markets head south again, for now at least it looks like this week's trading is set up for a more positive finish than we have been used to in a while," said IG Index's head of sales trading Tim Hughes.

Elsewhere in Asia, Singapore's stock measure vaulted 5.6%. Stock measures in Australia, Taiwan and India all added 3% or more. South Korea also fell marginally.

Overnight in New York, the Dow rose 239.66, or 3.5%, to 7,170.06. The Standard & Poor's 500 index climbed 29.38, or 4.1%, to 750.74. The Nasdaq composite index gained 54.46, or 4%, to 1,426.10.

Oil prices, which surged overnight, slipped below $47 a barrel as investors jockeyed over whether OPEC will announce a production cut at its meeting on Sunday, and how big the cut might be.

Benchmark crude for April delivery fell 23 cents to $46.82 a barrel by midday in Singapore on the New York Mercantile Exchange. Oil prices vaulted $4.70 on Thursday to settle at $47.03.

In currencies, the dollar gained to 98.28 yen from 97.52 yen. The euro fell to $1.2914 from $1.2989.

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