Most world markets recover modestly after financial stocks lead US rebound

Global markets mostly higher after US rebound

LONDON — Global markets were mostly higher Tuesday, buoyed by upbeat economic and earnings data that temporarily eclipsed a sell-off prompted by the U.S. government’s fraud case against Goldman Sachs & Co.

By 1:15 p.m. London time (8:15 a.m. EDT), the FTSE 100 was up 0.8 percent to 5,778.18 while France’s CAC 40 shot up by 1.24 percent to 4,019.72.

Germany’s DAX rallied ahead by 1.42 percent to 6,250.19, pulled ahead by strong economic data from Europe’s largest economy.

Stock futures in the U.S. were also up, building on a late day rally Monday driven by solid earnings reports. Oil climbed above $82 per barrel, breaking free from a two-day plunge fueled by flight disruptions in Europe from the Icelandic volcano, as well as the potential broader impact of the Goldman charges on other banks.

Markets worldwide had retreated after the U.S. Securities and Exchange Commission charged Goldman last week with fraud for its dealings in subprime mortgage securities.

Earlier concerns that the investigation would spread to other banks were slightly tempered by Citigroup Inc.’s surprisingly strong first quarter profits report late Monday. Goldman boosted sentiment further Tuesday when it announced its first-quarter earnings almost doubled to $3.3 billion.

News that Britain’s financial regulator was launching a full-blown investigation into Goldman Sachs International had temporarily pared gains in Europe, but the market appeared to rebound.

The Financial Services Authority’s interest in the case is likely to focus on the Royal Bank of Scotland, which paid $841 million to Goldman Sachs in 2007 to unwind its position in a fund acquired in the takeover of Dutch Bank ABN Amro, according to the complaint filed in the United States.

A closely watched survey showed Tuesday that German investor confidence increased in April to 53 points, buoyed by an increase in exports and a steady flow of orders. A day earlier, automaker Daimler AG posted strong preliminary results bolstered by “very solid results” at its core Mercedes-Benz Cars unit.

Ahead of the market opening in the U.S., the Dow Jones industrial average futures rose 18, or 0.2 percent, to 11,062. Standard & Poor’s 500 index futures rose 4.10, or 0.3 percent, to 1,199.70, while Nasdaq 100 index futures rose 6.25, or 0.3 percent, to 2,019.25.

The Dow rose 73.39 points, or 0.7 percent on Monday to 11,092.05, while the S&P 500 rose 0.5 percent to 1,197.52. The Nasdaq composite had slipped 0.1 percent to 2,480.11.

The gains in Europe followed rebounds in Asia, which saw Hong Kong’s Hang Send index climb 1 percent to 21.623.38 and South Korea’s Kospi up 0.8 percent at 1,718.03.

John Mar, head of sales trading at Daiwa Capital Markets in Hong Kong, said heavy selling in Asia after the Goldman news may have been overdone.

“What impact does it really have on this part of the world? I view it as an excuse to take profits,” Mar said. “The outlook is still fairly positive — corporate earnings have been good, the economic news is still improving, with the worst behind us in the U.S.”

Markets in India, Australia and Taiwan also gained while Japan’s Nikkei 225 stock average bucked the trend, shedding 0.1 percent to 10,900.68.

Chinese shares, down nearly 5 percent the day before after government took more action to restrain property prices, fell early in the session before stabilizing to close flat. The main Shanghai index finished virtually unchanged at 2,979.53.

Benchmark crude for May delivery was up $1.12 at $82.57. The contract fell $1.79 on Monday to settle at $81.45.

The dollar rose to 92.83 from 92.47 yen late Monday. The euro stood at $1.3493, barely up from $1.3488.