Stocks gain on U.S. hopes, euro holds above lows

Tue Jan 10, 2012 8:52am EST
 
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By Richard Hubbard

LONDON (Reuters) - Hopes for U.S. corporate results lifted global stocks on Tuesday and signs the debt-scarred euro zone economy might be less fragile than feared kept the shared currency clear of recent lows.

U.S. index futures pointed to a stronger open on Wall Street after stocks finished slightly higher in the previous session.

The contrasting fortunes of U.S. and European markets were highlighted by a profit warning from Europe's biggest consumer electronics maker Philips (PHG.AS: Quote) of soft fourth quarter profits due to weakness in its home region.

But European shares took heart from a positive outlook overnight for global demand from U.S. aluminum giant Alcoa (AA.N: Quote) to rise steadily from the start.

Nervous currency markets stayed focused on the outlook for the euro zone economy, government debt sales and how the region's banks will raise much needed capital to repair their balance sheets.

The euro rose to hold above 16-month lows hit on Monday, underpinned by a solid Austrian bond sale little influenced by the country's heavy exposure to Hungary and by data showing a surprise jump in French industrial output in November.

"Recent developments seem to suggest that activity in the biggest EMU countries is not on the verge of a full-blown collapse," Annalisa Piazza, economist at Newedge strategy, said.

The key FTSEurofirst 300 .FTEU3 stocks index was up 1.7 percent at 1,025.82 points, with gains led by mining stocks, while the global MSCI world equity index .MIWD00000PUS added nearly 1.0 percent, helped by earlier gains in Asian markets.   Continued...