By Sujata Rao
LONDON, Jan 25 (Reuters) - Global stocks posted fresh gains
on Friday, shrugging off an astounding $7 billion fraud at
French bank Societe Generale, while commodities rallied as a
U.S. tax stimulus package helped ease recession fears.
Healthy U.S. jobs data and the chance of another Federal
Reserve rate cut next week also stemmed the past week's flight
to safe-haven assets such as U.S. Treasuries, and fuelled gains
in stocks, emerging markets and high-yield currencies.
A $150 billion package of tax rebates and business
incentives, aimed at warding off a recession in the world's
largest economy, was agreed on Thursday by President George W.
Bush and Congressional leaders. []
Fears of a recession had led to hefty drops on world stocks,
some of which saw the worst losses since Sept 11 2001, but the
swift agreement on Thursday gave investors confidence, as did
the weekly U.S. jobless claims, which fell to a four-month low.
Buyers of banking stocks, which had suffered most during the
recent equity market rout, were not deterred by news of a rogue
trader scandal that will make a $7.16 billion dent in earnings
at Societe Generale <SOGN.PA>.
"The Societe Generale situation is providing a rationale for
the stock fall earlier in the week. People can see what caused
it which is giving the market some comfort and is the reason for
the bounce in the market," said Adam Cole, global head of FX
currency strategy at RBC Capital Markets in London.
The FTSEurofirst 300 index of top European shares <.FTEU>
bounced 1.9 percent, adding to a 5.4 percent leap on Thursday,
Germany's DAX rose one percent <> while Britain's FTSE and
France's CAC-40 <> jumped 1.6 percent.
Top gainers included the Royal Bank of Scotland <RBS.L>, up
2 percent, and BP <BP.L> rising 2.2 percent, while Socgen shares
rebounded 2.6 percent.
"Unlike previous mortgage-related writedowns by big banks,
this one is not a structural loss," said Kim Jeong-hwan, a
strategist at Woori Investment & Securities in Seoul.
"What investors are most fearful is uncertainty, rather than
an accidental loss the size of which has been already
identified, albeit huge."
Earlier Tokyo's Nikkei <> ended up 4.1 percent -- its
biggest daily percentage gain since March 2002. U.S. stock
futures pointed to modest gains on Wall Street later after New
York indices closed Thursday 1-2 percent higher.
Emerging stocks gained almost 3 percent <.MSCIEF>.
NO ONE WAY BET
But market players say coming sessions will not be a one-way
street for markets. Worries linger about the extent of banks'
losses from U.S. subprime mortgage securities ahead of earnings
announcements by European financial institutions next month.
"We expect sharp gains and losses in the next few days and
weeks," said Heinz-Gerd Sonnenschei, strategist at Postbank in
Bonn. "The U.S. has done many things to stabilise the market
such as the Fed rate cut, the stimulus package and help for
monoline insurers but all the bad news is not yet out there."
Growth-sensitive oil and metals rallied, with crude above
$90 a barrel <CLc1> at a three-day high.
A leading think-tank predicted Chinese economic growth would
slow only slightly in 2008 to 10.8 percent -- key as the
country's double-digit growth has been a driving force behind
this decade's oil and metals price rises.
Copper rose 2 percent, while spot gold and platinum hit
record highs, helped by news that power shortages had forced
South Africa's leading gold producers to suspend output.
Gold <XAU=> traded at $919.80 an ounce and platinum set a
record $1640 an ounce.
The yen came under pressure, falling almost 2 percent
against the euro <EURJPY=> while the dollar gained one percent
versus the yen, recovering from a recent 2-1/2 year low <JPY=>.
Japanese government bond futures had their sharpest fall in
a 1-1/2 years as surging Tokyo stocks prompted investors to dump
debt.The benchmark 10-year Japanese bond yield <JP10YTN=JBTC>
jumped 9.5 basis points to 1.480 percent.
But U.S. Treasuries steadied in Asia after witnessing the
biggest selloff in nearly four years on Thursday in New York.
Ten-year notes were bid up a third of a point to yield 3.6720
percent versus 3.711 percent in New York trade <US10YT=RR>.
Yields had fallen to around 3.45 percent earlier this week
and analysts stressed the jitters were not over yet.
(Reporting by Sujata Rao, editing by Mike Peacock)
