Optimism Boosts Stocks Around the Globe

Asian and European stock markets rode a wave of optimism Monday after U.S. stocks topped record highs, a Japanese central bank survey showed improving business sentiment and a French giant made a bid to create the world’s No. 4 oil company.

Tokyo’s Nikkei-225 index climbed 1.1% to close at 18,135.06, its highest level in more than 21 months, while Hong Kong stocks gained more than 2% and South Korean shares rose more than 3% Monday.

European markets, meanwhile, finished at or near record levels in an energy-led rally inspired by news of a $43-billion hostile bid by French oil company Total Fina for rival Elf Acquitaine.

Elf shares soared 21%, helping energy stocks in Europe rise more than 3% while the stock of predator Total Fina gyrated around its opening level.

Meanwhile, crude oil rose above $18 a barrel in London for the first time in 18 months on signs that OPEC, which satisfies about a third of the world’s demand, is cutting output as promised to end the glut.

Tokyo stocks were lifted by the Bank of Japan’s quarterly tankan survey of corporate sentiment, which showed a modest rise in an index closely watched by large manufacturers.

“The tankan figures reinforced a market view that Japan’s economy is over the worst,” said Shinichi Ichikawa, a strategist at Credit Lyonnais Securities in Tokyo.

The dollar shot up from a low of 120.90 yen to its highest level in nearly six weeks as the Bank of Japan’s dollar-buying intervention accelerated the currency’s advance in the tankan’s wake.

On U.S. stock markets, the Dow Jones industrial average ended Friday up 0.7% at a record 11,139.24. The Standard & Poor’s 500-stock index and the Nasdaq composite closed Friday in record territory for the third consecutive day.

In London, Europe’s biggest bourse, the FTSE-100, rose 100 points, or 1.54%, at 6,592, its third-highest close.

“We got a very friendly Wall Street and a very good tankan report from Tokyo, so I don’t see why we shouldn’t be happy,” said Edwin Moser of Merck Finck & Co. in Munich, Germany.

The Dow Jones Euro Stoxx 50 index of European blue chips was up 2.2% while the broader-based FTSE-Eurotop 300 rose 1.7%. The Dow Jones index of European energy stocks stood 4.2% higher.

In Sao Paulo, Brazilian stocks rose for a sixth session, led by banks, on optimism that falling interest rates will boost lending and bank profits.

Sao Paulo’s Bovespa index, which rallied 5.7% in dollar terms last week, rose 100 points, or 0.85%, to close at 11,936.01. The central bank could cut rates after the U.S. Federal Reserve indicated last week it won’t raise rates soon, easing borrowing costs for emerging-market companies and governments.

Mexican stocks picked up some steam in afternoon trading and closed higher in a market slowed by the absence of foreign investors.

Mexico City’s key IPC index closed up 1.2%, or 67.92 points, to 5,955.53, aided by expectations of strong second-quarter earnings reports.

In commodities trading, oil prices have surged 12% in the last month as exporters cut output to meet smaller quotas, adopted in March, reducing supplies in the U.S., the world’s largest oil-consuming nation. A Bloomberg survey showed that OPEC made 94% of promised reductions in June, up from 91% in May.

Brent crude oil for August delivery rose 52 cents, or 2.9%, to $18.18 a barrel on the International Petroleum Exchange in London, its highest closing price since Dec. 5, 1997. Crude oil markets on the New York Mercantile Exchange were closed Monday and the IPE stopped trading crude oil early because of the Independence Day holiday.