Stocks rise on Monday, Korean market nears high

Stock markets around the world continued to do well yesterday.

	8 July close	11 July close	Percent change
S&P 500	1,211.86	1,219.44	0.6
Nikkei 225	11,565.99	11,674.79	0.9
FTSE 100	5,232.2	5,242.4	0.2
DAX	4,597.97	4,663.38	1.4
CAC 40	4,300.31	4,321.56	0.5
Hang Seng	13,964.47	14,157.24	1.4
Straits Times	2,215.99	2,241.19	1.1
KOSPI	1,021.95	1,040.43	1.8

Note that the KOSPI in particular is now at its highest level since its peak at the beginning of 2000.

A fall in oil prices contributed to yesterday's gain in stock markets. NYMEX light sweet crude fell 71 cents to $58.92 a barrel yesterday as Hurricane Dennis in the Gulf of Mexico proved less destructive to oil facilities than feared. In addition, the Xinhua News Agency reported that Chinese crude oil imports rose by only 3.9 percent in the first half of 2005, compared to a 39.3 percent increase in the same period last year, indicating that China's oil demand is slowing.

China's slowdown could also be seen in its trade data released yesterday. China's trade surplus for June surged five-fold from a year earlier to US$9.68 billion as exports grew 30.6 percent while imports grew just 15.1 percent, far slower than the growth seen for much of last year.

Other trade-related news saw Britain's trade deficit narrow to £4.962 billion in May from £5.132 billion pounds in April.

Still in Britain, wholesale prices rose 2.1 percent in June from May, mainly due to high oil prices. Coupled with a fall in output prices by 0.2 percent, that is bad news for British manufacturers.

British house price inflation, however, slowed. According to the Office of the Deputy Prime Minister, house prices rose by 6 percent in the year to May compared with 6.9 percent in the year to April. However, the average house price rose slightly in May, standing at £182,651, compared with £181,832 in April.

In other news out of Europe, French industrial production rebounded in May, rising 0.3 percent. This is its first rise since January. French unemployment, however, rose in May, leaving the jobless rate at 10.2 percent, its highest level in more than five years.

On the whole, the data from yesterday seem compatible with a continued but gradual moderation in the global economy, something that stock markets are apparently not uncomfortable with. A lot, though, will depend on how bad price pressures are. The next few days will provide more clues on the latter.