Shares climb on French bond sale

European investors have already shrugged off last week’s credit rating downgrades by Standard & Poor’s of nine eurozone nations, while Asian sharemarkets declined in late reaction.

Wall Street, which fell on Friday, is closed for the Martin Luther King Day holiday.

Shares in France, Italy and Spain rose as the French government successfully sold two-year bonds.

The pan-European Stoxx 600 index gained 0.8% to end at 251.12 after spending most of the session swinging between small gains and losses.

The French CAC-40 index rose 0.9% to 3225, led by banking stocks, and the UK’s FTSE 100 index climbed 0.4% to 5,657.44, with media company Pearson rising 2.7%.

The biggest loser in the FTSE 100 was Carnival, whose shares sank nearly 17% in London, after the company’s Costa Concordia cruise ship ran aground off the coast of Italy.

Five are dead in the tragedy with another 16 still missing. Carnivals estimates its losses could be up to $US95 million.

In Germany, the DAX 30 index rose 1.3% to 6220.01, with car makers Daimler and BMW rising 3.6% and 2.6% respectively.

Goldman Sachs has reiterated buy recommendations on BMW and Fiat while adding Daimler to its conviction-buy list.

In Asia, Chinese stocks fell for a fourth straight session. Other markets generally declined on the eurozone downgrades.

Japan's Nikkei Stock Average fell 1.4% to 8378.36, Australia's S&P/ASX 200 index dropped 1.2% to 4147.2 and Korea's Kospi declined 0.9% to 1859.27.

China's Shanghai Composite shed 1.7% to 2206.19, Hong Kong's Hang Seng Index lost 1% to 19012.20 and Taiwan's Taiex shed 1.1% to 7103.62, with President Ma Ying-jeou's election victory unable to dent the Europe-inspired gloom.

In India, the Sensex edged up 0.2% to 16,189.36.

Commodities: Oil, gold up
Oil futures climbed as investors considered possible disruptions to supply in Iran and Nigeria.

The contract for February delivery added 86USc, or 0.9%, to $US99.56 in electronic trading. New York floor trading is closed.

The positive start to the trading week follows a 2.8% loss for oil last week, with prices pressured by a stronger US dollar and an unexpected jump in US oil inventories.

Gold futures advanced in electronic trading with the February contract at $US1640.40 an ounce compared with the US settlement of $US1630.80 on Friday.

PricewaterhouseCoopers’ annual Gold Price Report said that 80% of mining companies surveyed expected the price of gold to continue to increase this year.

The majority of respondents expected gold to peak at $US2000 an ounce in 2012. The price of gold rose 11% in 2001 until December 15 but gold stocks within the S&P/TSX Global Gold Index had declined 10.6% in the same period, PwC said.

Currencies: Euro rises above low
Currency markets were largely steady in European trading, with the euro trading above a 16-month low against the US dollar after a sharp pre-weekend selloff.

The euro was recently trading at $US1.2676 compared with $US1.2678 late on Friday in New York.

The euro was trading at ¥97.29 compared with ¥97.70. The UK pound was at $US1.5301 from $US1.5318. The dollar was trading at ¥76.77 from ¥76.95.