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Dubai: World stock markets rose strongly on Monday after closely watched manufacturing surveys reinforced hopes that the global economy may start to recover by the second half of the year.

The surging oil prices also supported the market rally across the world.

In Europe, the FTSE 100 index of leading British shares closed up 88.25 points, or two per cent, at 4,506.19 while France's CAC-40 was up 101.84 points, or 3.1 per cent, to 3,379.49 despite fears about a missing Air France flight from Brazil to Paris.

Germany's DAX surged 201.74 points, or 4.1 per cent, to 5,142.56 though analysts said the gains may have been exaggerated by lighter volume due to a holiday.

On Wall Street, the Dow Jones industrial average spiked 200.88, or 2.4 per cent, to 8,701.21 while the broader Standard & Poor's 500 index rose 23.20 points, or 2.5 per cent, to 942.34.


Copper for delivery in three months climbed 3.9 percent to $2.2830 a pound in New York and touched $2.2865, the highest since October 15. Gold climbed to a three-month high, rising as much as one per cent to $990.20 an ounce

Dubai Financial Market (DFM) yesterday rallied for a seven session straight with the benchmark closing 2.21 per cent higher at 1,919.60 points.

Blue chip stocks continued to see high trading with Global Investment House surging 9.50 per cent to Dh2.19 and Emaar rising 7.49 per cent to Dh3.73. DFM stock gained by 5.59 per cent to Dh1.70. The banking sector also reported strong gains yesterday.

Mathew Wakeman, Managing Director, Cash and Equity-linked Trading at EFG-Hermesn said: "Positive research from HSBC on Dubai's property sector caught many investors by surprise and coupled with near $70 oil has propelled the market to its current levels. Abu Dhabi Securities Exchange (ADX) yesterday ended almost flat, seeing its index rise by a slight 0.22 per cent to 2,685.18.

"Oil is up, European stocks are up, which is boosting local sentiment," said Mohammad Galal, Head of Foreign Institutional Sales at Al Futtaim HC Securities in Dubai. "Volumes over the past two days indicate market strength."

Crude oil rose to the highest since November as China's manufacturing expanded for a third month, indicating economic recovery.

Economy: Signs of improvement

Manufacturing from China to Europe is showing signs of improvement, suggesting the global economy may be over the worst of a recession despite the imminent bankruptcy of carmaker General Motors.

China, the world's third-biggest economy, said industrial activity expanded in May, while surveys in Europe showed the manufacturing recession easing. A US survey is expected to paint a similar picture to Europe later on Monday.

Asian stock markets jumped to eight-month highs and European shares rose in early trade undetered by news that GM will file for the United States's largest ever industrial bankruptcy before US markets open. US Treasury Secretary Timothy Geithner, in a visit to China, renewed the Obama administration's pledge to cut its huge fiscal deficit and promised "very disciplined" future spending.

-Reuters