World stocks were boosted on Monday by a robust start to the US holiday shopping season and reports that European leaders are considering legal means to force
debt-ridden euro countries into fiscal discipline.
Benchmark oil rose above $99 per barrel and the dollar fell against the euro and the yen.
European stock markets rose in early trading. Britain's FTSE 100 added 1.4 per cent to 5,235.40. Germany's DAX gained 2 per cent to 5,601.80 and France's CAC-40 jumped 2.1 per cent to 2,917.54.
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UK banksWall Street also appeared headed for a higher opening, with Dow Jones industrial futures rising 1.6 per cent to 11,370 and S&P 500 futures jumping 2 per cent at 1,176.70.
The
gains in Europe tracked those in Asia earlier in the day. Japan's Nikkei 225 index jumped 1.6 per cent to close at 8,287.49. South Korea's Kospi gained 2.2 per cent to 1,815.28 and Hong Kong's Hang Seng rose 2 per cent to 18,037.81. Australia's S&P/ASX 200 added 1.9 per cent to 4,058.20.
Benchmarks in Singapore, Taiwan and Thailand were also higher. Those in Indonesia and the Philippines fell. In mainland China, the benchmark Shanghai Composite Index gained 0.1 per cent to 2,383.03.
German media reported had over the weekend that German Chancellor Angela Merkel and French President Nicolas Sarkozy were studying legal changes - possibly amendments to the European Union growth and stability pact - to force nations using the euro common currency to comply with
strict rules for budget discipline and tough sanctions for violators.
The reports raised hopes that the region may be able to stem a debt crisis that has infected peripheral countries like Greece and is threatening bigger countries like Spain.
Surprisingly strong Thanksgiving sales in the US also helped boost market sentiment, said Francis Lun, managing director of Lyncean Holdings in Hong Kong.
A record 226 million shoppers visited stores and websites during the four-day US holiday weekend starting on Thanksgiving Day, according to early estimates by The National Retail Federation. The results for the first holiday shopping weekend show that retailers' efforts to lure shoppers during the weak economy are working. Holiday shopping can account for 25 to 40 per cent of a merchant's annual revenue.
But what really got markets going, Lun said, were Italian media reports that the International Monetary Fund was preparing up to 600 billion euros in loans for cash-strapped Italy, whose massive debts are becoming unmanageable because of
soaring borrowing costs.
But some analysts paid little heed to the report, saying the IMF simply could not afford such a loan.
"As of September the IMF had $385.5 billion of forward commitment capacity, so even if they designated their whole fund to Italy it would be well below the amount that has been speculated," Stan Shamu of IG Markets in Melbourne said in a report. "It would require huge increases in contributions from other nations."
Worries about Europe's debt crisis flared anew on Friday after Italy had to pay 7.8 per cent to borrow for two years at a debt auction. It's another sign that investors are increasingly hesitant to lend to European countries. Greece, Ireland and Portugal had to seek bailouts from international lenders when their interest rates crossed the 7 per cent mark.
During a shortened post-holiday trading session on Friday, the Dow Jones industrial average fell 0.2 per cent to close at 11,231.78. The S&P 500 lost 0.3 per cent to 1,158.67. The Nasdaq composite dropped 0.8 per cent to close at 2,441.51.
Benchmark crude for January delivery was up $1.49 to $98.26 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.09 to finish at $98.01 per barrel on the Nymex on Friday.
In currency trading, the euro rose to $1.3286 from $1.3230 late Friday in New York. The dollar weakened to 77.63 yen from 77.76 yen.
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