Stock market: Outlook upbeat as decade begins

Major European stock markets rumbled higher at the start of 2011, with bourses in Frankfurt and Paris gaining ground in the wake of an upbeat start across Asia.

In late morning European trade, the CAC-40 in Paris was up 2.2 percent to 3,886.92 as Germany's DAX rose 1.6 percent to 7,024.16. The London stock exchange was closed for a bank holiday.

The biggest Asian markets closed higher, as investor confidence was boosted by signs that China's efforts at keeping a lid on inflation may be working.

The biggest gainer in the benchmark Paris index was Lagardere SCA, whose shares jumped 6.9 percent to €32.95 after the media and defense company announced Friday it was in talks to sell its international magazine portfolio to U.S. publisher Hearst Corp. Lagardere has titles like Elle and Car & Driver.

Just before noon in central Europe, oil prices were up 42 cents to $91.80 on the New York Mercantile Exchange, as investors mulled how high they can go before sparking inflation. The dollar was higher against the yen but slipped compared to the euro.

Wall Street appeared set to open higher, with Dow futures gaining 69 points, or 0.6 percent, at 11,582. Broader S&P futures climbed 7.5 points, or 0.6 percent, to 1,260.50.

Economic reports could play on U.S. investors' minds. The Institute for Supply Management releases its manufacturing index for December and the Commerce Department reports on construction spending for November.

Hong Kong's Hang Seng index rose 400.60 points, or 1.7 percent, to close at 23,436.05, while the South Korean Kospi rose 19.08 points, or 0.9 percent, to finish at 2,070.80.

A monthly survey released over the weekend indicated that manufacturing in China slipped for the first time in five months. The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, dipped in December, though it was still the 22nd month of expansion.

That eased investor fears that authorities would take further steps to cool inflation, including by raising interest rates further, which could hurt economic growth.

"It may indicate that the mainland government may not need to further tighten monetary policy because it is already slowing down," said Kenny Tang, an executive director at Redford Asset Management.

Tang said fund managers returning from the holidays are also "reshuffling their portfolios to buy the lagging markets."

Hong Kong stocks were also lifted by Hutchison Whampoa Ltd., a conglomerate forming part of billionaire Li Ka-shing's business empire, which rose 5.2 percent after announcing a purchase of assets from China Resources (Holding) Co. in a deal worth 5.7 billion Hong Kong dollars ($733 million).

Singapore's benchmark rose 1.3 percent while those in Taiwan and India also posted gains.

Markets in Japan, Australia, New Zealand, mainland China, Thailand and Britain were closed for the New Year's holiday.

In currencies, the dollar rose 0.3 percent against the yen to 81.42. The euro rose 0.3 percent against the greenback to 1.3302.

Shortly before noon in central Europe, benchmark oil for February delivery was up 42 cents to $91.80 in electronic trading on the New York Mercantile Exchange. The contract rose $1.54 to settle at $91.38 on Friday.