World sharemarkets up overnight as investors bet on China

Specialists James Ahrens, left, and Robert Tuccillo work on the floor of the New York Stock Exchange. The success of a Greek debt swap overnight has pushed Wall St up. File photo / AP

Wall Street advanced overnight, as did equities in Europe, as investors bet that China is set to release better-than-predicted economic growth data.

China's first quarter gross domestic product is expected to show the world's No. 2 economy grew 8.4 per cent from a year earlier, after expanding 8.9 per cent in the previous quarter.

In afternoon trading in New York, the Dow Jones Industrial Average climbed 1.34 per cent, the Standard & Poor's 500 Index gained 1.23 per cent and the Nasdaq Composite Index rose 1.15 per cent.

Optimism that China, a large user of raw materials, is doing better than expected lifted commodity prices including those of copper, and helped stocks of Rio Tinto, BHP Billiton, US Steel and Freeport-McMoRan Copper & Gold.

In fact, the outlook for copper is a good one. The metal will average US$9,000 a ton in the third quarter, 9.5 per cent more than now, according to the median estimate of the top five analysts in Bloomberg Rankings in the past eight quarters.

So far, there's optimism too at the start of American first-quarter earnings season.

Hewlett-Packard jumped more than 6 per cent after researcher Gartner said the global personal-computer industry unexpectedly expanded in the first quarter and that HP is gaining market share both at home and abroad.

Google is set to release results later today.

US economic reports today showed a mixed picture. Unemployment claims rose 13,000 in the week ended April 7 to 380,000, which was higher than expected. Economists cautioned that the data are typically volatile around this time of the year.

"The increase caught our attention, but the next few weeks will be very telling. If claims continue to tick higher then it will be a signal that the sword over the jobs market is real. For now we take this report with a grain of salt," Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania, told Reuters

On the bright side, consumer confidence held near a four-year high and the trade gap shrank a bigger-than-expected 12.4 per cent to US$46 billion in February

In Europe, the Stoxx 600 Index ended the session with a 1.2 per cent gain.

Helping the mood was an increasing appeal of Italian and Spanish bonds. The yield on Italy's 10-year bonds dropped 14 basis points to 5.40 per cent, while the yield on Spain's 10-year bonds fell 7 basis points to 5.81 per cent.

"The easing bond yields are a signal to investors here that things aren't quite that bad in Europe," Brian Gendreau, market strategist with Cetera Financial Group, told Reuters.

The central bank of the world's No. 3 economy is ready to help, too. Bank of Japan governor Masaaki Shirakawa pledged to continue to add monetary stimulus.