iOS app Android app More

Tokyo's Olympic bid success gives Nikkei a boost

stumbleupon: Tokyo's Olympic bid success gives Nikkei a boost   digg: US Works With Sudan Government Suspected Of Aiding Genocide   reddit: Tokyo's Olympic bid success gives Nikkei a boost   del.icio.us: Tokyo's Olympic bid success gives Nikkei a boost

PAN PYLAS | September 9, 2013 12:27 PM EST | AP

Compare other versions »

LONDON — Japanese stocks outperformed others Monday after Tokyo's successful bid to host the 2020 Olympic Games boosted sentiment over the future of the world's number 3 economy.

Elsewhere, Syria remained a key focus for investors across financial markets. With Russia urging Syria to put its chemical weapons under international control, there are even hopes that a U.S.-led strike may be averted and that's helped oil prices drift back below $110 a barrel – the benchmark New York rate was 81 cents lower at $109.72 a barrel. U.S. stock markets were also driven higher through the session in the run-up to a vote this week in the U.S. Senate to authorize a strike.

However, the standout performer was Japan's Nikkei 225, which jumped nearly 2.5 percent to 14,205.23 as traders hoped the Tokyo Olympic Games in 2020 will boost the country's construction sector, which the government is already targeting as part of its program to kick-start its economy. Figures showing that the Japanese economy grew at an annualized rate of 3.8 percent in the second quarter of the year instead of the previous estimate of 2.6 percent also boosted sentiment.

"Obviously the Olympics won't come around for another seven years, but preparation begins straight away so the impact on the economy between now and then, for example in the construction sector, will be very welcome," said Craig Erlam, market analyst at Alpari. "This could bring about additional support the economy, which is already in recovery mode."

There was little follow-through in markets from the Nikkei's advance, particularly in Europe where the mood was subdued through the day. The FTSE 100 index of leading British shares closed down 0.3 percent at 6,530.74 while Germany's DAX was steady at 8,276.32. The CAC-40 in France ended 0.4 percent lower at 4,040.33.

U.S. stocks performed far better, with the Dow Jones industrial average 0.7 percent higher at 15,021 and the broader S&P 500 index up 0.6 percent at 1,666.

As well as keeping an eye on developments surrounding Syria, particularly the return of Congress in the U.S., traders around the world will continue to monitor the U.S. economic releases to gauge whether the Federal Reserve will start to reduce its monetary stimulus this month. Last Friday's mixed U.S. jobs data failed to clarify the picture of whether the Fed will begin the so-called tapering of its $85 billion worth of monthly asset purchases.

"Still, the economy and labor market appear healthy enough to spur a token reduction in asset purchases on September 18, provided the upcoming data do not disappoint and the Syrian situation does not boil over," said Sal Guatieri, an analyst at BMO Capital Markets.

The dollar's near-term fortunes will likely rest on what the Fed decides. The uncertainty over the Fed meant it was a fairly volatile day for the currency. While the euro was up 0.7 percent at $1.3274, the dollar was 0.5 percent firmer at 99.57 yen.

Earlier, traders in Asia were also lifted by news that China, the world's second-largest economy, recorded a bigger-than-expected trade surplus of $28.6 billion in August. That helped the benchmark Shanghai index surge 3.4 percent to 2,212.52 while Hong Kong's Hang Seng added 0.6 percent to end at 22,750.65.

Australian markets were also in focus Monday after a weekend election victory for the country's first conservative government in six years. Prime Minister-elect Tony Abbott has pledged to repeal a 30 percent tax on coal and iron ore miners' profits, which could help commodities companies. Mining shares outperformed the index, with BHP Billiton up 1.4 percent in Sydney, and Rio Tinto 1 percent higher. Overall though, the stock market advance was modest as the victory was widely expected, with Australia's S&P/ASX 200 rising 0.7 percent to 5,181.50.