BANGKOK - World stock markets advanced Tuesday as investors awaited new U.S. economic data amid hopes that more measures are on the way to spur lackluster growth in the world's biggest economy.
Oil prices hovered above US$87 a barrel in Asia while the dollar strengthened against the euro but was down against the yen.
European shares were mostly higher in early trading. Britain's FTSE 100 jumped 2.4 per cent to 5,251.53, catching up on gains after being closed for a holiday Monday. Germany's DAX slipped less than 0.1 per cent to 5,664.99 while France's CAC-40 rose 0.5 per cent to 3,168.41.
But Wall Street turned jittery after a strong start to the week Monday. Dow Jones industrial futures fell 0.3 per cent to 11,486 while S&P 500 futures lost 0.3 per cent to 1,204.
Asian shares registered gains in a day absent the volatility that has shaken markets recently. The Nikkei 225 index in Tokyo added 1.2 per cent to 8,953.90 as investors seized on positive U.S. consumer spending figures and overlooked a rise in Japan's unemployment rate.
Hong Kong's Hang Seng gained 1.7 per cent to 20,204.17 and South Korea's Kospi was 0.8 per cent higher at 1,843.82. Australia's S&P/ASX 200 rose 0.1 per cent to 4,269.20.
Signs that the U.S. may be staving off another recession helped exporters that depend heavily on demand from the West. Sharp Corp. rose 2.8 per cent and Panasonic Corp. was 3.3 per cent higher. Isuzu Motor Corp. rose 3.4 per cent.
One sign of possible help on the horizon was the Federal Reserve's decision to extend its upcoming policy meeting to two days instead of one. That raised the possibility of action, at least in the eyes of traders, to jolt the economy.
Another reason for the upbeat mood: investors were anticipating an announcement next week by President Barack Obama on a new jobs initiative.
"I think the focus is on President Obama's speech, which is related to measures that will revive the economy," said Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong. "All this provides some of sort positive expectations for investors."
Mainland Chinese shares lost ground, however, with the benchmark Shanghai Composite Index falling 0.4 per cent to 2,566.60. The Shenzhen Composite Index fell 1 per cent to 1,148.29.
Shares in food-related companies and financials advanced while shares in manufacturing and plastics companies weakened on expectations that upcoming manufacturing data could be worse than earlier forecast.
European shares jumped Monday after Greece's second- and third-largest lenders agreed to combine, creating the country's largest bank. Greece's government and central bank have been urging banks to merge, saying it would help them survive.
In the U.S. on Monday, stocks rose broadly after it became clear that Tropical Storm Irene had caused far less damage than many had feared. Insurance shares rose sharply as analysts lowered their estimates of how much damage the storm would cause.
An increase in consumer spending also helped to push stocks higher. The government reported that spending rose 0.8 per cent in July. It was a sharp turnaround from June, when Americans cut spending 0.1 per cent, the first decline in 20 months.
The Dow Jones industrial average rose 2.3 per cent to close at 11,539.25. The Standard & Poor's 500 index rose 2.8. The technology-focused Nasdaq rose 3.3 per cent to 2,562.11.
Despite Monday's gains, analysts warned market sentiment will remain fragile ahead of U.S. economic indicators this week that could show slowing growth. Later Tuesday, the Consumer Confidence Index for August will be released. Then on Friday, the Labor Department will release U.S. employment data for August.
"The perception that stocks are more cheaply valued has helped to feed into appetite for equity markets. However, likely weak data in the days ahead both in the US and Europe may result in a reality check for markets," Credit Agricole CIB said in a research note.
In currencies, the euro dropped to $1.4438 from $1.4505 late Monday in New York. The dollar slipped to 76.73 yen from 76.95 yen.
Benchmark oil for October delivery was down 22 cents to $87.05 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.90 to end at $87.27 per barrel on the Nymex on Monday.
In London, Brent crude for October delivery was down 23 cents to $111.64 on the ICE Futures exchange.
