China data boosts stocks as Syria diplomacy cools oil

Tue Sep 10, 2013 4:37am EDT
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By Marc Jones

LONDON (Reuters) - World shares climbed to a near one-month high and oil and government bonds slipped on Tuesday, helped by receding expectations of U.S.-led military action against Syria and after better-than-expected Chinese data.

Riskier assets saw a strong start in Europe after Monday's comments from U.S. President Barack Obama that Russia's plan to put Syrian chemical weapons under international control could be a breakthrough in the crisis. They were followed by upbeat industrial and retail figures from China.

Asian shares ended at a 3-month high and the feel-good factor continued in Europe where early gains of 0.6 - 1 percent on London's FTSE .FTSE, Germany's Dax .GDAXI and Paris's CAC 40 .FCHI pushed the FTSEurofirst 300 .FTEU3 up 0.6 percent.

Oil fell to $113 a barrel, its lowest in two weeks, while safe-haven U.S. and German government bonds and gold and other precious metals were also back-pedaling.

"What we are seeing is being driven by the tensions in Syria being watered down a bit and a strong performance in the Asian and U.S. markets overnight," said Lee Curtis, a sales trader at City Index in London.

"We had clients buying into the market first thing after the Chinese data, and they continue to hold their longs (bets on further rises) as well so they seem pretty bullish."

Russia's proposal to work with Damascus to put its chemical weapons under international control could avert planned U.S. action although Obama said he will still continue efforts to convince politicians to back military action.

Lower oil prices are usually a particularly positive development for Asia, a region that relies heavily on imports for its energy needs.   Continued...

A visitor walks past logos at the Tokyo Stock Exchange in Tokyo June 13, 2013. REUTERS/Toru Hanai