World stocks surge, led by China, extending volatile pattern of sharp gains and losses

Energy Associated Press

Global stock markets swung higher Thursday, led by a surge in Chinese shares, extending a volatile pattern of sharp sell-offs and rousing gains as investors second guess uncertain prospects for the world economy.

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KEEPING SCORE: Britain's FTSE 100 jumped 1.1 percent to 6,459.44. France's CAC 40 was 1.1 percent higher at 4,268.83 and Germany's DAX added 1.3 percent to 9,939.39. U.S. shares were also set to rise. Dow futures were up 0.8 percent to 17,500. S&P 500 futures gained 0.8 percent to 2,023.40.

GLOBAL WORRIES: Markets have been jittery so far this year as sharp drops in oil and metal prices raise doubts about the strength of the global economy. The World Bank also gave investors pause for thought, lowering its global growth forecast for this year to 3 percent from 3.4 percent; it blamed sluggish economies in Europe and Japan and a slowdown in China. Weak U.S. retail sales for December added to nerves about the economic outlook.

THE QUOTE: "Volatility continues to show its hand, although this could be the new normal," said IG strategist Chris Weston in a market commentary. "Markets continue to grapple with falling inflation, spiraling commodities, crazy bond yields, political uncertainties and ultimately a market that feels central banks have no juice to meet their mandates."

COMMODITIES: The benchmark U.S. crude futures contract was down 78 cents at $47.71 a barrel in electronic NYMEX trading. The contract surged $2.59 to close at $48.48 in New York on Wednesday but is down 41 percent in the past three months amid oversupply. Brent crude was down $1.32 at $48.54 a barrel in London. Copper, considered a bellwether of global demand because it is used by many industries, tumbled for a third day.

INDIA UPSIDE: The Reserve Bank of India cut its key interest rate Thursday by a quarter percentage point in a surprise move that adds impetus to government efforts to revive Asia's third-biggest economy. The decision to lower the rate to 7.75 percent, announced more than two weeks before the central bank's planned monetary policy review on Feb. 3, follows several months of declines in India's stubbornly high inflation. The Sensex stock index in Mumbai soared 2.6 percent.

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ASIA'S DAY: Japan's Nikkei 225 jumped 1.9 percent to 17,108.70, getting back above the psychologically significant 17,000 point level as the yen weakened, a plus for the nation's giant exporters. South Korea's Kospi was barely changed, inching up 0.03 percent to 1,914.14. China's Shanghai Composite surged 3.5 percent to 3,336.45. Hong Kong's Hang Seng rose 1 percent to 24,350.91. Stock benchmarks in Singapore and Indonesia rose while Taiwan and Australia fell.

CURRENCIES: The dollar rose to 117.77 yen from 117.49 yen late Wednesday in Asia. The euro fell to $1.1774 from $1.1789.

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