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US homes data cheers world markets

In Europe, the FTSE 100 index of leading British shares was up 66.83 points, or 1.3 percent, at 5,360.82 while Germany’s DAX rose 43.75 points, or 0.7 percent, to 5,974.28. The CAC-40 in France was 27.23 points, or 0.7 percent, higher at 3,899.29.

On Wall Street, the Dow Jones industrial was up 59.18 points, or 0.6 percent, at 10,473.32 soon after the open while the broader Standard & Poor’s 500 index rose 5.79 points, or 0.5 percent, to 1,119.84.

The buying momentum was buoyed by the news that home resales in the U.S. surged to their highest level in nearly three years during November.

The National Association of Realtors said sales rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million in November, from a downwardly revised pace of 6.09 million in October.

The third straight monthly increase was way more than anticipated — the consensus in the markets was for a rise to around 6.3 million.

The existing home sales data helped soothe some earlier concerns stoked by a Commerce Department report showing that the U.S. economy grew at an annualized rate of 2.2 percent in the third quarter. That was way down on its previous estimate of 2.8 percent made just a month ago and weighed on sentiment in the markets.

However, analysts said the data is too backward-looking at this stage, hence the gains after the housing figures.

That means that, contrary to many expectations, stocks continue to rally this week — many analysts were anticipating a modest pullback as investors shut up shop for the year by booking profits accumulated during the nine-month bull market.

“The way stock indices are moving at the moment — although it is admittedly in low volumes — we could yet see a move to fresh highs before 2009 is out,” said David Jones, chief market strategist at IG Index.

Earlier, Japan led Asia’s advance as the yen continued to fall against the dollar — a lower yen makes Japanese exports more competitive, all other things being equal. Nissan Motor Co., for example, ended over 6 percent higher.

The Nikkei 225 stock average jumped 194.56, or 1.9 percent, to close at a three-month high of 10,378.03.

By early afternoon London time, the dollar was up a further 0.7 percent on the day at 91.79 yen — a marked advance from the 14-year low of 84.81 yen as recently as November.

Elsewhere, Hong Kong’s Hang Seng climbed 143.94, or 0.7 percent, to 21,092.04 and South Korea’s Kospi gained 0.7 percent to 1,655.54. Singapore’s market was up 1.2 percent, Australia’s index advanced 1.5 percent and Taiwan shares rose 0.9 percent.

But China’s main market dived more than 2 percent amid fears the government will take steps to slow other sectors of the economy after vowing to control rising property prices. The Shanghai index slid 2.3 percent to 3,050.52 with losses led by real estate shares.

Elsewhere, the euro fall to a fresh three and a half month low of $1.4260. By mid-afternoon London time the single European currency was down 0.1 percent on the day at $1.4267.

The dollar has bounced back from 15-month lows against the euro in the last three weeks amid mounting expectations that the U.S. Federal Reserve will start withdrawing its extraordinary liquidity measures and raising interest rates sooner than expected. The euro has been dogged by concerns over the economic situation in a number of European countries.

Oil fell back towards the $73 a barrel after oil cartel OPEC kept production levels unchanged.

Benchmark crude for February delivery was down 45 cents at $73.27 in electronic trading on the New York Mercantile Exchange.