Stocks, oil firmer as China, US data reassures

London: World stocks extended gains and oil rebounded yesterday as upbeat data from China and the United States underscored an economic recovery, weighing on safe-haven government bonds and the low-yielding yen.

China's industrial output accelerated in November to 19.2 per cent from a year earlier, its fastest pace since June 2007. Imports surged 26.7 per cent, their first rise in 13 months.

On Thursday Wall Street rose after signs of improving trends in the job market and a decline in US October trade deficit reassured investors the economy was on a steady growth path.

"Risk is back on. But it's a bit difficult to get too excited," said Niels Christensen, currency strategist at Nordea in Copenhagen. MSCI world equity index rose 0.5 per cent, still off its 14-month high set earlier this month.

The FTSEurofirst 300 index bounced 0.7 per cent, led by gains in chemical and basic resource shares.

Emerging stocks gained 0.8 per cent. US stock futures pointed to a firmer open on Wall Street, ahead of closely-watched data on US retail sales.

US crude oil rose 0.5 per cent to $70.90 a barrel.

Bund futures fell 28 ticks, erasing gains made after investors flocked to the perceived safety of German bonds following a downgrade in Greece's credit rating and a cut in Spain's rating outlook.

The Greek and German ten-year government bond yield spread narrowed to 206 basis points from around 230 bps late on Thursday.

The dollar fell 0.1 per cent against a basket of major currencies, while the yen fell 0.6 per cent to 88.88 per dollar.