World shares, commodities and growth-linked currencies rose on Thursday as stronger-than-expected Chinese exports raised hopes of a more robust recovery in the global economy this year.
However, gains in Europe's equity markets were more limited with investors waiting for European Central Bank president Mario Draghi to give his views on the outlook for the recession-bound euro zone after a rate setting meeting later in the day.
"We're not expec ting him to move on policy, but what Mr. Draghi might have to say could be of interest with respect to possible interest rate cuts further down the line," Michael Hewson, senior analyst at CMC Markets, said.
A strong response by investors to Spain's first debt sale of 2013 added to the positive sentiment in the markets ahead of the ECB meeting at which it is expected to leave rates unchanged.
The pan-European FTSEurofirst 300 index steadied just under its 2-year high of 1,169.19 points, with London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were also little changed.
Earlier the Chinese data lifted Asian markets to help the MSCI world equity index add 0.25 per cent.
Gains in the S&P 500, Dow Jones and Nasdaq 100 futures pointed to a higher open on Wall Street, where the main focus will be on corporate earnings as the fourth quarter reporting season gathers pace.
China surprised most observers by reporting its exports had rebounded sharply in December to hit a seven-month high, with imports growing at double the expected rate. However, the data showed demand for its goods from the United States and Europe remained subdued.
A broad measure of Chinese credit growth was also found to have risen strongly, making it likely that the world's second-largest economy will be shown to have expanded by around 7.8 per cent in 2012 when fourth quarter GDP data come out next week.
China's GDP growth touched a 3-1/2-year low of 7.4 per cent between July and September last year.
The strength of imports revealed in the data stoked hopes of greater demand across the commodity markets, lifting copper, iron ore and oil prices.
"Risk is back on after the China data," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. "General market sentiment is much more positive, with hopes of better growth pushing up most markets."
London copper was up 0.9 per cent at $8,156 a tonne while U.S. crude futures rose 1.4 per cent to $94.45 a barrel and Brent futures added one per cent to $112.90.
The economic report from China, Australia's largest trading partner, sent the Aussie dollar to a three-week high of $1.0568 and contributed to further falls in the Japanese yen.
The yen has been weakening on expectations of massive fiscal spending and aggressive monetary easing in the coming weeks advocated by the new government of Prime Minister Shinzo Abe.
The dollar was up 0.4 per cent to ¥88.22, inching closer to its highest since July 2010 of 88.48 reached on Friday. The euro was also up 0.5 per cent to ¥115.43. Last week it hit ¥115.99, its highest since July 2011.
The euro received an extra boost after Spain successfully sold a larger-than-expected amount of new bonds for a lower cost at a closely watched debt auction.
Madrid raised €5.8-billion ($7.56-billion U.S.) at the sale, up from an expected €5-billion, taking its first step towards borrowing the €121.3-billion the government says it needs this year.
Most of the demand was for a bond maturing in 2015 that would be covered by an ECB bond-buying program if Spain were to apply for international aid, though the success of the auction has probably pushed back the timing of any request.
"Against this backdrop the Spanish government will be in no rush to request external assistance," said Nick Stamenkovic, macro strategist at RIA Capital Markets, who added that he still expects Madrid to call for help by mid-2013.
The euro rose 0.2 per cent to its highest level of the day of $1.3094 after the auction, while yields on 10-year Spanish bonds fell below 5 per cent to reach a 10-month low of 4.99 per cent.