World markets rise as Japan nuclear crisis eases

World markets were higher Monday, buoyed by news over the weekend that Japan was making progress in its battle to control radiation leaks at a nuclear complex that was severely damaged in the country's worst-ever earthquake.

Oil prices, meanwhile, jumped to near $103 a barrel after Libyan leader Moammar Gadhafi vowed a "long war" amid allied military strikes over the weekend in the OPEC nation.

European shares were higher in early trading. Britain's FTSE 100 rose 1.2 percent to 5,787.34. Germany's DAX was up 2.3 percent to 6,814.44 and France's CAC-40 rose by 1.8 percent to 6,814.87.

Wall Street was poised to open higher, with Dow Jones industrial futures up 1.1 percent to 11,923 and S&P 500 futures up 1.3 percent to 1,291. In currencies, the dollar was up against the yen and down against the euro.

Hong Kong's Hang Seng index rose 1.7 percent to 22,685.22, unaffected by an announcement Friday that the People's Bank of China would raise the bank reserve requirement ratio by half a percentage point on March 25. The hike, the third this year and intended to cool lending and inflation, did not rattle markets.

Chinese property stocks listed in Hong Kong rose strongly, including China Overseas Land & Investment Ltd., up 3.8 percent, and China Vanke Co. Ltd. up 3.9 percent. On the mainland, the Shanghai Composite Index rose 0.1 percent to 2,909.14.

South Korea's Kospi index was up 1.1 percent to 2,003.42 and Australia's S&P/ASX 200 gained 0.4 percent to 4,642.80.

Japan's Nikkei index was closed for a public holiday after a week of dizzying drops and modest rebounds. Benchmarks in Singapore, Taiwan, India, Indonesia, Thailand and New Zealand also gained.

Markets headed upward even though the crisis in Japan - which began March 11 when a 9.0-magnitude quake struck off the northeastern coast - was far from over.

The World Bank said Japan may need five years to rebuild from the earthquake and tsunami that decimated the industrial northeast, causing $235 billion in damage and likely killing more than 18,000 people.

The disaster also seriously damaged the Fukushima Dai-ichi nuclear plant, causing a serious radiation leak.

Japanese officials had reported some progress over the weekend in their battle to bring the plant under control. But the crisis was far from over, with the discovery of more radiation-tainted vegetables and tap water adding to public fears about contaminated food and drink.

On a positive note, the World Bank said it expected growth in Japan to pick up later this year "as reconstruction efforts, which could last five years, accelerate."

A number of analysts saw the volatile atmosphere in markets as an opportunity to scoop up stocks on the cheap.

"Equities have been hit by Middle Eastern turmoil ... and now the Japanese earthquake. The bigger risk for the future is likely to be a further spike in oil prices," Citigroup Global Markets said in a report. "Overall, however, if these events leave the global economic recovery intact, as we expect, investors should look to buy."

Moody's Investor Service in Sydney said the economic costs of the earthquake, tsunami and nuclear crisis were worse than first anticipated and that Japan's utility and insurance sectors would be hit hard.

"For many other industries, disruptions to power, begun by the earthquake and now exacerbated by the nuclear crisis, will cause an interruption to production which is more severe than we had anticipated," said Shinsuke Tanimoto, a senior vice president in Tokyo.

Production disruptions were being felt worldwide, with Asian electronics makers among those feeling the reverberations most intensely.

Samsung Electronics Co. and Hynix Semiconductor Inc. buy 50 to 60 percent of the wafers they use to make computer chips from Japan's Shin-Etsu Chemical Co., which shut two factories damaged in the quake. Shares in Hynix drooped 0.2 percent while Samsung shares were down 0.1 percent.

Meanwhile, the governments of the world's seven major advanced economies last week agreed to jointly intervene in currency markets to prevent the yen from surging against the dollar. An overly strong yen could hurt Japan's exporters who will be crucial to Japan's ability to recover from the crisis.

The impact was immediate - the dollar rose above 81 yen on Friday after sliding as far as 76.53 yen, an all time low. The dollar was at 81.15 in Asia on Monday, up from 81.06 in Europe on Friday. The euro fetched $1.4167, up from $1.4159.

The Japanese central bank tried to calm money markets last week by injecting 38 trillion yen ($470 billion) in emergency cash on top of its regular funding activities. But another crisis - this one in the Middle East - threatened to shake the market's fragile confidence.

U.S. and allied forces launched a military campaign over the weekend in support of a U.N. resolution authorizing military action against Libya to protect civilians amid an internal rebellion against Gadhafi.

Benchmark crude for April delivery was up $1.59 to $102.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 35 cents to settle at $101.07 per barrel on Friday.

The prospect of higher oil prices pushed energy stocks higher. CNOOC, China's largest offshore oil producer, rose 3.6 percent. China Shenhua Energy Ltd., the country's biggest coal producer, rose 3.1 percent, as the crisis in Japan has raised concerns over the safety of nuclear energy worldwide and could cause governments to wean themselves off nuclear power.

On Friday, the Dow Jones industrial average gained 83.93 points, or 0.7 percent, to close at 11,858.52 on Friday. The Standard & Poor's 500 index rose 5.49, or 0.4 percent, to 1,279.21. The Nasdaq composite index gained 7.62, or 0.3 percent, to 2,643.67.