London - European stocks rose on Tuesday, with investors in bullish mood after Wall Street notched up a fourth straight record close and Tokyo's Nikkei hit a seven-year high on talk that a Japanese sales tax increase may be delayed.
The gains in Tokyo stocks helped push the yen lower versus the dollar.
The greenback hit a seven-year high against the Japanese currency as it recovered from losses chalked up after Friday's below-forecast US payrolls data.
Oil prices fell further, with Brent crude dropping to a four-year low below $82 (R927) a barrel.
European shares were also boosted by positive updates from companies including Germany's Henkel and Hochtief.
The pan-European FTSEurofirst 300 index rose 0.4 percent.
“So far German results have been slightly better than expected,” said Gregor Kuhn, an analyst at IG, who thought the strong corporate numbers would support the DAX index for the remainder of the year.
“Expectations had been downgraded before the reporting season and Russia was one of the reasons. The other one was economic weakness in the euro zone, but I think that is priced in by now.”
The Nikkei share average rose 2.1 percent to its highest close since October 2007 on speculation that Prime Minister Shinzo Abe might postpone a sales tax increase planned for next October and call a snap election.
An April hike in the tax by 3 percentage points chilled consumption in the second quarter, driving the world's third largest economy into its sharpest slowdown since the global financial crisis.
JAPANESE GROWTH
“You just can't come up with a scenario of a victory by the opposition. So this means Abe will have four more years to go,” said Norihiro Fujito, senior strategist at Mitsubishi UFJ Morgan Stanley Securities.
“Both fiscal and monetary policies will be supporting growth in the near future. And today markets started to price that in.”
Elsewhere, MSCI's main index of Asia-Pacific shares excluding Japan fell 0.3 percent.
Wall Street was led higher by transportation and healthcare shares.
Lower oil prices helped airlines and some consumer firms.
Both the Dow Jones industrial average and the S&P 500 saw record high closes.
While Friday's US jobs data missed high expectations and pushed the dollar down, analysts said it underscored the economy's resilience in the face of slowing global demand.
A rise in US Treasury yields on Monday lifted the dollar broadly and in early European trade it hit a fresh seven-year high of 115.86 yen on the EBS trading system.
The euro was all but flat at $1.2411, not far from a two-year low of $1.2358 hit on Friday.
Reflecting the willingness to take on risk, yields on safe-haven German government bonds rose 1.7 basis points to 0.84 percent.
US 10-year Treasuries yielded 2.36 percent.
The US bond market is closed on Tuesday for the Veterans Day holiday.
Brent crude oil fell almost 1 percent to a four-year low below $82 a barrel.
It has lost nearly 30 percent since June, partly due to rising production, especially in the United States.
Spot gold touched a low of $1 145.92 in Asian trade before recovering slightly to $1 149.30. - Reuters