World stocks firm on EU summit, Chinese data

Global stock markets were firmer on Monday, picking up on apparent progress at a weekend EU summit on the eurozone debt crisis and welcoming positive Chinese growth data. They said miners and resources got a boost from Chinese manufacturing figures showing a return to growth and easing concerns that the world\'s second largest economy faced a possible hard landing. Asian markets were up sharply, with Hong Kong gaining more than four percent, after weekend meetings of European leaders made good progress on tackling a debt crisis that threatens to plunge the world back into recession. Dealers said the markets, however, will want to see that progress turned into a definitive and binding agreement at a second EU and eurozone summit on Wednesday if the gains are to be sustained. News that eurozone private sector activity slid further in October also dampened European sentiment. In London, the FTSE 100 index leading shares was up 0.55 percent at around 1400 GMT, the Frankfurt DAX rose 0.31 percent and in Paris the CAC 40 added 0.71 percent. Other European markets posted similar modest gains but Athens briefly plunged more than 5.0 percent, led down by the banking sector after the EU summit signalled that private investors will take a heavier hit on Greek debt. Milan was down 0.78 percent as Italian Prime Minister Silvio Berlusconi called an emergency cabinet meeting to review new austerity measures after EU leaders pressed him to fulfill pledges to cut Italy\'s huge debt. The euro soared to $1.3954, hitting the highest level since September 8, but then pulled back to $1.3857, down from $1.3894 late Friday. In New York, stocks got off to a positive start on the EU and Chinese leads plus better-than-expected earnings from Caterpillar. The Dow Jones Industrial Average rose 0.27 percent while the tech-heavy Nasdaq Composite added 0.45 percent. \"European Union leaders vowed to unveil a detailed financial plan for the debt-strapped region on Wednesday, following a second summit. On the home front, meanwhile, the latest quarterly results from Caterpillar are bolstering the blue chips,\" said Andrea Kramer at Schaeffer\'s Investment Research. \"The weekend EU summit has clearly not solved the crisis,\" said Rabobank analyst Jane Foley. \"However, bearing in mind the slow progress at which European politics tends to operate, there was a reasonable flow of news and sufficient progress for investors.\" European leaders, including French President Nicolas Sarkozy and IMF chief Christine Lagarde, on Sunday said \"good progress\" had been made in talks on the debt crisis that has threatened the world economy. They announced few details ahead of the second summit on Wednesday. The eurozone wants to beef up its 440-billion-euro ($610 billion) rescue fund, the European Financial Stability Facility, to convince markets it has the means to protect highly indebted nations such as Italy and Greece. \"Investors are awaiting the next EU summit on Wednesday, which should produce final decisions on the three-prong strategy to deal with the eurozone crisis involving measures to recapitalize European banks, leverage the EFSF and provide greater debt relief for Greece,\" said Citi analyst Valentin Marinov. \"The meetings over the weekend provided more clarity about what to expect,\" he added. Asian markets posted strong gains after data showed Chinese manufacturing activity at a five-month high in October, lifted by a pick-up in output and orders despite the global economic turmoil. The preliminary HSBC purchasing managers\' index (PMI) stood at 51.1 in October, up from 49.9 in September, boosting hopes that the world\'s second-largest economy can avoid a hard landing. A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction. Tokyo jumped 1.90 percent, Hong Kong soared 4.14 percent and Shanghai added 2.29 percent. Sydney rallied 2.73 percent.