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. Last Updated: 07/27/2016

Rosy Data Lift Stocks Worldwide

LONDON -- Stock markets around the world surged and government debt yields hit multi-month highs Monday as data indicated that the pace of economic recovery was hotting up on both sides of the Atlantic.

European shares hit one-month highs after Japanese and U.S. stock indices scaled six-month peaks in the wake of surveys showing stronger-than-expected rebounds in the key manufacturing sectors in the United States and euro zone.

The Dow Jones industrial average soared 2.6 percent Friday as investors bet the world's biggest economy was on the firm road to recovery.

Government debt yields jumped -- with the German euro zone benchmark 10-year at an eight-month high -- as markets priced in the improved outlook, lessening the chance of interest rate cuts from the world's top central banks.

The yen posted solid gains against the dollar and the euro after a surge in Tokyo stocks, but the U.S. unit inched up against the single currency undeterred by data showing business sentiment in the euro zone at its highest level in five months in February.

"Worldwide the economic data has generally been stronger than people imagined a few weeks ago. Markets had been priced for a weak economy and weakening growth and are now readjusting this view," a London debt trader said.

"A rally in stocks is adding fuel to the fire."

European shares were up from the start, pushed higher by a 4 percent rise in the U.S. Nasdaq index Friday after a survey showing the U.S. manufacturing sector grew in February for the first time in 18 months.

The FTSE Eurotop 300 index was 1.51 percent higher at 12:30 p.m., with computer-chip makers among the top gainers.

"The mood is clearly beginning to turn around and the worries about Enron were absent last week. It's positive that over the past week the market has looked at good news and responded positively to it," said David Thwaites, a European strategist at BNP Paribas.

The DJ Euro Stoxx 50 index of euro zone blue chips was up 2.05 percent.

Media stocks were bolstered by better than expected earnings from publisher Pearson although a profit warning after U.S. markets closed on Friday from Oracle Corp was causing some concern.

The Dow Jones Industrial Average rose to a six-month high Friday and the Nasdaq jumped 4.11 percent after the U.S. Institute of Supply Management's key index shot up to 54.7 from January's 49.7 and way above the 50 level indicating outright expansion.

On Monday, the European Commission said the business climate indicator for the 12-nation euro zone was at its best level for five months.

"We forecast ... recovery starting in the first quarter of this year and I think this proves to be correct, and therefore the latest data strengthens our case for the recovery starting early this year," commission spokesman Gerassimos Thomas told a news conference.

The Reuters Eurozone Purchasing Managers index for the manufacturing sector, also released Friday, rose to 48.6 in February from 46.3 in January.

Tokyo's Nikkei rose 5.90 percent to 11,450.2 for its highest finish since Aug. 16, buoyed by Wall Street's gains and signs that major banks had stepped up bad loan disposals.

The surge in the Nikkei was cited as the key reason for the yen's rise of more than three-quarters of a percent against the dollar and the euro since late New York trade Friday. The yen stood around a two-week high of 132.23 to the dollar and at 114.35 against the euro.