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AP
World Markets Rally; Wall Street Closed
Tuesday January 2, 1:19 pm ET
Global Stock Markets Make Strong Start in 2007; Wall Street Closed to Observe Day of Mourning
LONDON (AP) -- Stock markets around the world had a strong start to 2007 on Tuesday as investors bet on more mergers and rising valuations -- trends that sent equities soaring at the end of 2006.
In London, the FTSE 100 index rose 1.5 percent to 6,310.90, led by miners Lonmin, up 2.9 percent, BHP Billiton, also up 2.9 percent, and Anglo American, up 2.1 percent. In Germany the DAX Xetra 30 index gained 1.3 percent to 6,681.13. Retailer Metro AG jumped 4.6 percent despite a denial from major shareholder the Haniel family that it was buying more stock.
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The markets were able to post their big gains even in the absence of guidance from U.S. exchanges, which were closed for the funeral of President Gerald R. Ford.
In France, the CAC-40 index rose 1.4 percent to 5,617.71. Utilities company Suez SA rose 1.7 percent following a statement from financier Francois Pinault's investment holding company that it doesn't rule out a bid for the utility.
"We're off to a great start," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities, adding that the overall tone for the market seems fairly positive.
"It's as if all the factors that have been driving equity markets recently, such as deal making, are still pretty much in play," he said.
In Asia, stock markets in Hong Kong and Indonesia closed at record highs and stocks in Taiwan reached a six-year peak.
Hong Kong's blue-chip Hang Seng Index rose 345.46 points, or 1.7 percent, to close at 20,310.18. The Weighted Price Index of the Taiwan Stock Exchange gained 97.08 points, or 1.2 percent, to 7,920.8 -- its highest closing level since finishing at 8,026.32 on Aug. 25, 2000.
The Jakarta Stock Exchange Composite index, boosted by hopes that a stronger rupiah would lead the Central Bank to cut key interest rate, closed up 30.997 points, or 1.7 percent, at 1,836.520.
Markets in several countries, including Japan, Thailand, Malaysia, China, Singapore and New Zealand, Italy, Switzerland, remained shut on Tuesday for New Year's holidays.
In the United States, the four-day shutdown of the stock markets, including the weekend and New Year's, marks the longest stretch in which U.S. equities have not traded since the Sept. 11, 2001, terrorist attacks, when the market was shut for six days.
Analysts said they expect the positive market tone in Europe to continue.
"In 2007, we expect the market to continue to rise. It's unlikely to be as strong as last year in Europe but close to 10 percent (gain) we think is quite likely," said Patrik Schowitz, a European equity strategist at HSBC.
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(What's This?)
A man walks past a bank electric board showing the Hong Kong share index Tuesday, Jan. 2, 2007. Hong Kong stocks hit a record high on Tuesday, led by heavyweight China Mobile the mainland's biggest mobile phone operator. The blue-chip Hang Seng Index rose 345.46 points, or 1.73 percent, to close at 20,310.18. (AP Photo/Lo Sai Hung)
AP Photo: A man walks past a bank electric board showing the Hong Kong share index Tuesday, Jan. 2, 2007.
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