World stocks soar as euro-zone fears ease

Stocks on Wall Street rose the most this year as investors took confideence from a successful Portuguese government debt auction.

Stock markets have been subdued in recent weeks as the euro-zone debt crisis continues and investors worried that economic growth in Europe could be stunted if governments are forced to enact tougher austerity measures.

The Portuguese government sold €1.25 billion in bonds in an auction at yields that were below market expectations, sending the euro higher and giving sharemarkets their biggest lift so far this year.

The biggest gains were among bank stocks, which also fared well in the US after Wells Fargo upgraded its assessment of the banking sector.

JP Morgan Chase and Bank of America were the best performers among the Dow components, gaining 2.6% and 2.0%, respectively. Citigroup gained 2.8%, Morgan Stanley added 2.7% and Wells Fargo itself gained 1.9%.

At the close, 10am NZ time, the Dow Jones Industrial Average was up 83.56 points, or 0.7%, at 11,755.44 after being higher in earlier in the session. The S&P 500 index added 0.9%, to 1285.96 and the Nasdaq Composite gained 0.7% to 2737.33.

The market also responded to another step up in US import prices in December, rounding out their biggest three-month gain in over a year on the back of resurgent energy prices. The price of imported goods rose 1.1% in December, following an upwardly revised 1.5% increase in November, versus an initial estimate of 1.3%.

Other markets: Europe, Asia up
Stocks in Spain and Greece surged 5%, leading a European market rally, as a successful Portuguese bond auction allayed near-term fears about the spread of the euro-zone debt crisis.

A top European official said the region's bailout fund should be strengthened, further boosting sentiment.

The Stoxx Europe 600 Index rose 1.4% to end at 285.79, hitting its highest level since September 2008.

Aerospace group EADS rose 2.1% in Paris after its Airbus unit announced a record-breaking order for 180 aircraft from Indian budget carrier IndiGo. The order was worth $US15.6 billion at list prices.

The gain helped lift the French CAC 40 index, which ended up 2.2% at 3945.07. In Germany, the DAX 30 index gained 1.8% to 7068.78, led higher by a 4.3% rise for Deutsche Bank. Rival Commerzbank gained 5.3%.

The UK's FTSE 100 index closed up 0.6% at 6050.72, with HSBC Holdings rising 3.8%.

Asian markets ended on a positive note as resource sector shares and financials got a lift from a higher finish on Wall Street and an overnight jump in commodity prices.

Hong Kong's Hang Seng Index rose 1.5% to 24125.61 and China's Shanghai Composite added 0.6% to 2821.31 while Australia's S&P/ASX 200 and Korea's Kospi each advanced 0.3% to 4724.21 and 2094.95, respectively.

Indian shares snapped a six-day losing streak, with the Sensex rising 1.8% to close at 19534.10. Japan's Nikkei Stock Average ended little changed, up 0.02% to 10512.80, Taiwan's Taiex gained 0.4% to 8955.00, Thailand's SET was up 0.6% to 1019.51 and Singapore's Straits Times was up 0.1% to 3244.94.

Commodities: Oil, gold up
Crude oil futures extended early gains, helped by a weakening US dollar and a government report showing a decline in US stockpiles.

Light, sweet crude for February delivery recently traded 87USc, or 1%, higher at $US91.98 a barrel in New York. Brent crude on the ICE futures exchange traded 87USc higher at $US98.48 a barrel.

Gold futures settled modestly higher in a late reversal as lower prices enticed buyers and the dollar weakened further.

Gold for February delivery added $US1.50, or 0.1%, to $US1385.80 an ounce in New York after trading as low as $US1376.30 an ounce.

Currencies: Euro up, dollar down
The euro broke through its 200-day moving average of $US1.3074 as it rebounded following better-than-expected results from the sale of Portuguese debt. The euro rose to $US1.3107 from $US1.2980 late on Tuesday.

The dollar fell slightly against the yen, trading at ¥83.33 from ¥83.21 late on Tuesday, while the euro was at ¥108.84 from ¥108.00. The pound was at $US1.5708, up from $US1.5619, while the dollar was at 0.9719 Swiss franc from 0.9734.