Global stocks started the new year on a high note as data showed that factories in China and Britain are still churning out goods and German unemployment is at a record low.
Britain's FTSE 100 rose 1.3 per cent, while Germany's DAX gained 1.2 per cent. Japan's Nikkei rose 0.7 per cent, and Hong Kong's Hang Seng gained 2.4 per cent. France's CAC 40 index was the only major exception, declining 0.4 per cent.
U.S. stock futures rallied, with Dow futures up 1.8 per cent, or 217 points, at 12,367 and S&P 500 futures gaining 1.8 per cent, or 22.8 points, at 1,275.40 about two and a half hours before the New York Stock Exchange opened for business.
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German unemployment fell more than expected in December, by 22,000 from the previous month to a seasonally adjusted 2.888 million. The jobless rate edged down to 6.8 per cent from 6.9 per cent in November -- a new record low since figures for unified Germany were first published.
China's official Purchasing Managers' Index rose to 50.3 in December from 49 in November, moving above the 50 mark which separates expansion from contraction. The index for non-manufacturing sectors rebounded to 56.0 from 49.7.
British manufacturing also beat expectations in December, showing signs of stabilising after a two-month decline.
Europe's debt crisis still lingers in the background. Investors are particularly concerned over Italy as it faces around 100-billion euros of redemption and coupon payments in the first four months of 2012, with 10-year borrowing costs near the crucial 7 per cent level.
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Worries over Greece were reinforced after a government spokesman said it would have to leave the euro zone if it failed to clinch a deal on a second 130-billion euro bailout with its international lenders.
The euro rose about 0.8 per cent against the U.S. dollar to around $1.3030, but stayed within striking distance of its 2011 trough of $1.2858 hit last week.
Gold rallied 1.9 per cent, rising to $1,597 (U.S.) an ounce. The metal's correlation with the euro/dollar exchange rate is at its most positive in nearly two years, meaning the bullion price is more likely to move in lockstep with the euro than at any other time since January 2010.
Copper hit a three-week high, lifted by fund allocations at the start of the year and by the Chinese data. Three-month copper on the London Metal Exchange rose 0.78 per cent to $7,659.25 a tonne.
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U.S. crude oil rose 2.7 per cent to $101.48 a barrel.
The Canadian dollar traded at 99.06 U.S. cents.