A look at economic developments around the globe

AP News
Posted: Jan 04, 2010 2:39 PM

A look at economic developments and activity in major stock markets around the world Monday:


LONDON _ World stock markets shot higher on the first trading day of 2010 after encouraging manufacturing data around the globe reinforced hopes that an economic recovery is gathering pace. In Europe, a survey in the 16 countries that use the euro rose to a 21-month high and a manufacturing index for Britain rose to a 25-month high.

The FTSE 100 index of leading British shares closed up 1.6 percent, Germany's DAX rose 1.5 percent and the CAC-40 in France was 1.6 percent higher.


BEIJING _ China's manufacturing sector expanded at its fastest rate in 20 months in December, according to a purchasing managers' survey. It was the ninth straight month of expansion as government stimulus spending boosted domestic demand and foreign sales rose,

The HSBC China Manufacturing PMI rose to 56.1 from November's 55.7 on a 100-point scale where numbers above 50 show activity expanding. That was the highest level since the survey began in April 2004.

In Asian markets, Japan's Nikkei 225 index advanced 1 percent, South Korea's Kospi added 0.8 percent and Australia's main index was up 0.1 percent. However, Hong Kong's Hang Seng slipped 0.2 percent and Shanghai's index ended down 1 percent.


MINSK, Belarus _ An energy price dispute between Russia and Belarus escalated as the Belarusian state power company threatened to cut off electricity to Russia's westernmost region in apparent retaliation for a Russian oil price hike.

Russia was still shipping oil to Belarus and through the country to Europe, officials said, allaying fears of a repeat of last year's gas cutoff through Ukraine. Russia's Prime Minister Vladimir Putin voiced hope for a quick deal.

However, Putin stressed in televised comments that a solution must be based on Russian law _ a signal Moscow would be unlikely to cede any ground on its claims.

Russia had said earlier that it was ready to provide tax-free oil for Belarus' internal consumption, but would impose a 100-percent tax on all the oil Belarus processes for export to the West.

Belarus buys about 20 million metric tons of Russian crude a year, but consumes only about one fourth of that. The rest is refined and exported to the West.


TOKYO _ Shares in Japan Airlines surged 31 percent after the Japanese government came up with additional financing for the troubled carrier.

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Separately, Japan Airlines and alliance partner American Airlines denied local media reports that said JAL had chosen Delta as its new partner.

Japanese transport minister Seiji Maehara told reporters Sunday the state-owned Development Bank of Japan will double its credit line for Japan Airlines Corp. to 200 billion yen ($2.2 billion).

That should be enough to keep the airline afloat while the government works out details of a bailout for the cash-strapped carrier, government officials said.


MADRID _ Recession is causing Spaniards to squirrel away more of their money, with the household savings rate in the third quarter of 2009 up 4.6 percent compared to a year earlier.

The savings rate for households and non-profit institutions was 14.1 percent, the National Statistics Institute said.


SINGAPORE _ Singapore's economy shrank in the last three months of 2009 after surging for two straight quarters, sparking fears of a renewed recession.

The Trade and Industry Ministry said gross domestic product fell an annualized, seasonally adjusted 6.8 percent in the fourth quarter, led by a 38 percent plunge in manufacturing.