World markets buoyed by S&P push to record high

February 28, 2014 - 12:35 PM

MUMBAI, India (AP) — World stock markets rose Friday, boosted by a strong performance on Wall Street, where the S&P 500 index was on track to close at another record high.

Investors looked past a downward revision to the U.S. economic growth rate in the fourth quarter, to 2.4 percent from 3.2 percent, and focused on strong manufacturing data out of the Chicago area.

That helped the S&P, which had closed at a record on Thursday, push even higher. It was up 0.7 percent at 1,866.54 while the Dow was up the same rate at 16,387.07.

In Europe, Germany's DAX closed 1.1 percent higher at 9,692.08 while France's CAC 40 rose 0.3 percent to 4,408.08. Britain's FTSE 100 ended flat at 6,809.70.

Investors are keeping a nervous eye on the crisis in Ukraine after the country's new interior minister, Arsen Avakov, accused Russia's military of staging a "military invasion and occupation" by blocking a Ukrainian military airport in the Black Sea port of Sevastopol in Crimea.

Russia remained silent while Ukraine's fugitive president, Viktor Yanukovych, told a news conference in Moscow that he would keep fighting for his country.

"The Ukraine situation seems to be escalating in the background and could haunt markets in coming weeks," said IG market analyst Stan Sahmu.

Until this week, investors had monitored developments in Ukraine with a degree of nonchalance. Now they are worrying that Russia may be drawn in after Moscow granted shelter to Ukraine's fugitive president, Viktor Yanukovych, after recent deadly protests in Kiev swept in a new government.

In Asia, China's tightly controlled currency, the yuan, was allowed to fall to 6.1450 to the dollar. That followed a steady decline over the past two weeks after the yuan hit record highs, coming close early this year to breaking through six to the dollar.

Analysts believe China's central bank is preparing to widen the narrow band within which the yuan is allowed to fluctuate each day. That would be an effort to discourage speculators by allowing more market flexibility and to cool inflows of money attracted by higher Chinese interest rates.

The central bank's move "largely reflects its determination to tame appreciation expectations and counter hot money inflows," said DBS Group in a report Friday. "It does not suggest a fundamental shift of policy toward weakening the currency."

China's Shanghai Composite Index rose 0.4 percent and South Korea's Kospi gained 0.1 percent. The Hang Seng in Hong Kong was little changed while India's Sensex gained 0.4 percent.

Japan's Nikkei 225, the regional heavyweight, was an exception, dropping 0.6 percent after a raft of economic data released Friday suggested the economy needs still more help in weathering a 3 percent sales tax increase in April.

In currency markets, the euro was up 0.7 percent to $1.3809 while the dollar fell 0.1 percent to 102.06 yen.

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AP Business Writer Joe McDonald in Beijing contributed.