HONG KONG – World stock markets rebounded Monday after the Bush administration revived hopes of a bailout for troubled U.S. automakers and China announced a multibillion dollar plan to spur consumer spending.
Asia and Europe's advance was another sign world markets may be stabilizing, at least in the short term, from their dizzying declines over the last three months, analysts said.
The upward swing followed Wall Street, where stocks rallied from an early sell-off Friday as the Treasury Department said it was ready to assist Detroit's Big Three automakers after a $14 billion rescue plan died in the Senate.
U.S. stocks looked poised to build on last week's gains as Wall Street futures rose moderately. Dow futures were up 11 points, or 0.1 percent, at 8,700 and S&P500 futures rose 0.5 points, or 0.1 percent, to 885.90.
As in the U.S., investors appeared unfazed by dismal economic data. Japanese shares led Monday's advance even as the country's central bank released figures showing confidence at major manufacturers marked its sharpest drop in 34 years. China also largely shook off more bad news about waning factory output.
"Investors think the automakers are going to be rescued after all," said Nicole Sze, Singapore-based investment analyst at Bank Julius Baer & Co., which manages about $300 billion in assets.
"It does seem the market is reacting to stimulus and bailout measures positively and choosing not to focus on data showing a slowdown in growth," she said.
Tokyo's Nikkei 225 index jumped 428.79 points, or 5.2 percent, to 8,664.66 points, and Hong Kong's benchmark Hang Seng index added 288.56, or 2 percent, to 15,046.95 points.
Major European bourses opened higher with Britain's FTSE-100 up 1.3 percent, France's CAC-40 gaining 1.6 percent and Germany's DAX up 2.2 percent.
South Korea's Kospi rose 4.9 percent to 1,158.19 and major stock measures in Taiwan, India, Australia and Singapore were higher by 2 percent or more.
In mainland China, Shanghai's key index rose 0.5 percent to 1,964.37 after Saturday's announcement from the central government to increase the amount of money circulating in the economy next year to boost consumer spending.
Beijing's latest effort to keep the world's fourth-largest economy on track seemed to overshadow news that growth in China's factory output fell to its lowest level in nearly seven years. According to the government, industrial output rose 5.4 percent in November from a year earlier, down from October's 8.2 percent growth, as trade plunged.
Among Monday's top gainers were car companies as investors bet the Bush administration would tap a $700 billion financial bailout fund to aid U.S. automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
South Korea's Hyundai Motor Co. soared 7.1 percent. In Japan, Toyota Motor Corp. surged 9.8 percent and Honda Motor Co. jumped 8.5 percent despite a strengthening yen, which erodes the earnings of Japan's exporters.
The dollar weakened to 90.84 yen from 91.15 late Friday, when it fell to 13-year low of 88.16 yen. The euro bought 1.3441 dollars.
Light, sweet crude for January delivery was up 10 cents to $46.38 a barrel, after reaching $47.64 earlier in the session, in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. The contract Friday fell $1.70 to settle at $46.28.