Global shares rally stalls

The big surge in world sharemarkets on Wednesday, when the Dow rose 490 points, has proved to be a one-day wonder.

While Asian markets played catch-up, stocks on Wall Street and in Europe stalled on an unexpected rise in US jobless claims and German Chancellor Angela Merkel continued opposition to an expanded role for the European Central Bank and the issue of eurozone bonds.

Investors are focused on the December 9 European Union summit, where they hope politicians will come up with concrete solutions to the debt crisis.

In the US, new unemployment claims rose 6000 in the latest week to 402,000, above the 390,000 claims economists had been expecting. The figures contrasted with Wednesday's bullish private-sector hiring figure.

The Dow Jones Industrial Average shed 25.05 points, or 0.2%, to 12,020.03 at the close (10am NZ time). It had added 814 points over the previous three sessions.

The S&P 500 index was down 0.2% to 1244.59. Financial stocks fell the hardest while the more defensive utilities, consumer-staple and healthcare sectors led gainers.

The technology-heavy Nasdaq Composite, which remained in positive territory throughout the session, was up 0.2% to 2626.20.

In other US news, the Institute for Supply Management showed US manufacturers swimming against a tide of contracting activity elsewhere in the world.

The ISM's manufacturing purchasing managers' index increased to 52.7 in November from 50.8 in October. A reading above 50 indicates expanding activity.

Other markets: Europe down, Asia up
European stocks snapped a four-session winning streak, as investors eyed mixed results from Spanish and French bond auctions as well as a downbeat survey of the eurozone's manufacturing sector.

Manufacturing activity contracted in November at the steepest rate since June 2009, although the figures were in line with expectations.

The Stoxx Europe 600 index fell 0.7%, to 238.49.

The German DAX 30 index fell 0.9%, to 6035.88,, the French CAC-40 index dropped 0.8%, to 3129.95 and the UK's FTSE 100 index fell 0.3%, to 5489.34.

Asian markets rallied sharply to catch up on Wednesday’s action.

Hong Kong's Hang Seng Index jumped 5.6% to 19,002.26, its best one-day climb in nearly two months. But its gain of 1012.91 points was the biggest one-day leap since Dec. 8, 2008.

Japan's Nikkei Stock Average rose 1.9% to 8597.38, putting it at its highest close since November 14. Korea's Kospi climbed 3.7% to 1916.18 while Australia's S&P/ASX 200 index added 2.6% to 4228.60, its fourth consecutive gain.

China's Shanghai Composite Index climbed 2.3% to 2386.86 but didn't undo all of Wednesday's 3.3% loss. Two measures showed manufacturing activity in China shrank in November for the first time in nearly three years.

India's Sensex rose 2.2% to 16,483.45.

Commodities: Oil steady, gold up
Light, sweet crude oil for January delivery was down 3USc at $100.33 a barrel in New York on a weaker labour market reading.

ICE North Sea Brent crude oil for January was down 1.7%, or $US1.91, lower at $US108.61 a barrel as supplies of Libyan oil are recovering faster than expected.

Gold touched fresh two-week highs as a weaker US dollar drew buyers.

The contract for December delivery was up 40USc at $1745.90 a troy ounce in New York after earlier touching $US1753.30 an ounce, the highest intraday price since November17.

Currencies: Euro recovers against dollar
The US dollar pared its decline against the euro. It traded at $US1.3465 compared with $US1.3445 late on Wednesday.

The dollar was at ¥77.69 compared with ¥77.63 late on Wednesday and the euro traded at ¥104.61 from ¥104.18. The UK pound bought $US1.5689 from $US1.5705.

The Swiss franc weakened sharply versus the dollar and the euro on suggestions the Swiss government may consider negative interest rates to weaken its currency.

The euro was 1.2330 versus the Swiss franc and the dollar bought 0.9159 franc from 0.9132 franc.