Shares in Europe rose after mining stocks advanced

Shares in Europe rose after mining stocks advanced. But investors were reminded about the debt problem in the European countries after S&P downgraded Japan's credit rating to AA-. S&P noted in a statement : "The downgrade reflects our appraisal that Japan’s government debt ratios -- already among the highest for
rated sovereigns -- will continue to rise further than we envisaged before the global economic recession hit the country.”Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said: “Investors are a little bit nervous, but the bias is still reasonably on the upside. The winners of the last year are more or less being sold and people are pouring money into the ones that did not perform so well in 2010. But we still have many more challenges to face. There is a possibility of new tensions in theeuro zoneand Japan reminds us that many countries are reasonably indebted. I think we are in a late stage of this rally and are not too far from some correction."
US stocks continued their rise with the Standard & Poor's 500 gaining again after rise in home sales and good earnings report from Technology companies beat the news on Japan's credit downgrade by S&P.James Dunigan, chief investment officer at PNC Wealth Management in Philadelphia, said: “We’re in repair mode. As confidence improves, home sales will rise and that will be an important piece of the puzzle in this recovery. We still need to see progress in hiring. The US, Japan and Europe are not out of the deleveraging woods yet. Still, earnings have been good, valuations are reasonable. It might not be the best entry point, but it’s certainly not time to reduce your equity allocation.” It was seen that yen getting weak against the dollar, after downgrading of Japan's credit rating. But experts feel that a weaker yen would boost overseas income forJapanese companies.According to Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc, : “The rating cut by S&P doesn’t mean a new perception of the market, and it may lead to a weaker yen, which is welcome.”The yen weakened against the euro to as low as 114.01. The dollar too rose to 83.22 against the yen. The pound however rose
against the dollar and traded 0.1 percent stronger at $1.5951.
Unlike Tuesday's oil , Wednesday saw oil rally above $87 a barrel after President Barack Obama's statement calling for lower corporate taxes. Phil Flynn, analyst at PFGBest Research in Chicago, said: “Prices are holding and part of that may be due to the fact that President Obama, in his State of the Union message, had struck a generally pro-business stance.”Oil for for March delivery rose $1.32 to settle at $87.33 a barrel.
Gold advanced after a dip after a very good record on the gold-backed exchange-traded fund, the US COMEX gold futures. When gold was down, Dennis Gartman, an economist and the editor of the Suffolk,Virginia-based Gartman Letter, said: “Our urge to be long gold has fallen quite sharply, and the trend has turned rather badly against the longs.”US Gold futures for February delivery settled down $12.20 at $1,332.30 an ounce.
The Nikkei rose despite the credit rating agency, S&P's downgrade of Japan's credit rating on Thursday. According to Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities : “The market may be strong in the morning, but in the afternoon, investors may become cautious about
Asian stocks moves."The benchmark Nikkei 225 ended 0.7 percent high at 10,478.66.
Treasuries in the US fell after stocks gained on rise in US new home sales numbers. Head of US dollar derivatives trading in New York, Christian Cooper, said: “We are seeing some softness in Treasuries as stocks are up early and there is a slightly more optimistic global economic outlook that is pressuring Treasuries within a range.”Yields on 10-year notes rose to 3.34 percent.
To help fund for the Irish government in bailout, the European Financial Stability Facility's debut bond was sold yesterday when it traded for the first time. This took German bund lower.Ten-year german bonds was four basis points lower and settled at 3.18 percent.