European stocks close sharply higher

EUROPE'S main stock markets closed with strong gains on Wednesday, boosted by Wall Street where the Dow continued its push into record territory.

London's FTSE 100 index of leading companies gained 1.17 per cent to finish at 6,387.37 points, while in Frankfurt the DAX 30 jumped 2.27 per cent to 7,810.63 points, and in Paris the CAC 40 rose 1.99 per cent to 3,743.71 points.

In Milan the FTSE-Mib soared 3.19 per cent to 15,929 points and Madrid's IBEX 35 rose 3.35 per cent to 8136.4 points.

In foreign exchange activity, the European single currency hit a one-month high at $1.3122. It later stood at $1.3058, compared with $1.3080 in New York late on Tuesday.

In Wall Street action, the Dow continued to climb after pressing through another record close on Tuesday, when it ended at 14,673.46 points.

Traders appeared to look past US Federal Reserve meeting minutes that suggested the Fed was closer to ending its stimulus measures if the jobs market continues to improve as data released after the meeting was disappointing.

The Dow Jones Industrial Average rose 0.88 per cent to 14,802.98 points in midday trading on Wednesday.

The S&P 500 broke through the 1,575 level to make new all-time highs, showing a 1.12 per cent gain to 1,586.21 points.

The tech-rich Nasdaq Composite Index lifted 1.62 per cent to 3,290.37 points.

"We've seen a big turnaround in sentiment amongst our clients, who are now positioned in expectation of (European markets) catching up with the US benchmarks," said analyst Matt Basi at trading group CMC Markets.

"Rising demand and falling inflation in China is the perfect combo for cyclical stocks, and new Dow highs only serve to fuel the optimism further in the short term."

Asian markets were mostly higher on Wednesday, with Tokyo supported by the weak yen, while Shanghai slipped as official data showed a rare trade deficit for China in March.

China's customs agency said Wednesday exports climbed a below forecast 10.0 per cent last month, and imports jumped a bigger-than-expected 14.1 per cent, resulting in a trade deficit of $US880 million ($A843.03 million). Economists had tipped a surplus of $US14.7 billion.

"One positive that can be seen in the data is the improvement in imports which suggests domestic consumption is continuing to pick up." said Alpari analyst Craig Erlam.

"This is essential if China is going to maintain its high growth rates in the years to come as it makes the transition to more consumption driven growth rather than being overly reliant on its exports."

Hong Kong stocks added 0.75 per cent and Tokyo rose 0.73 per cent, while Seoul gained 0.77 per cent, but Sydney was 0.18 per cent lower and Shanghai finished flat.

The China data came one day after officials said inflation had come in below estimates, which analysts said indicates ongoing weakness in the world's number two economy, still struggling to recover from slower growth last year.

The yen recovered modestly, edging up to 99.61 yen against the dollar, having hit a near four-year low of 99.66 against the dollar on Tuesday as it was weighed down by Bank of Japan stimulus moves.

The Japanese unit, which also struck a January 2010 low against the euro at 130.51 yen on Tuesday, rose to 130.09 yen in European trading on Wednesday.

On the London Bullion Market, gold prices dipped to $1,575 per ounce from $1,577.25 late on Tuesday.

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GM to invest $A4.79 bn in Opel/Vauxhall

GENERAL Motors will invest four billion euros ($A4.79 billion) in its German subsidiary Opel and British sister brand Vauxhall in 2013-2016, the US auto giant's chief saya.

"As a global automotive company, GM needs a strong presence in Europe, in terms of design and development as well as manufacturing and sales," GM chairman and chief executive Dan Akerson said at Opel headquarters in western Germany.

He said the investment aimed to allow Opel and Vauxhall to grow in the medium term and would permit Opel to launch 23 new models and 13 new power train transmission units by 2016.

Opel is "on the right track" and has GM's "full support" in its restructuring plan as well as its aim to balance its books by mid-decade, Akerson told gathered Opel chiefs, local politicians and workers.

The German carmaker has been making losses for years as it has been slow to react to the crisis in demand for cars in Europe, and GM has ordered Opel's management to prescribe draconian cost-cutting.

The restructuring plan was approved by three of Opel's sites in Germany recently, except at its Bochum factory.

Last month Opel said it would press ahead with plans to phase out auto production at Bochum at the end of 2014, earlier than planned.

A proposed agreement for keeping Bochum open until the end of 2016 - in exchange for a wage freeze, the giving up of some fringe benefits and other cost-saving measures - was rejected by unions and employees.

However the plan was accepted at Opel's other three sites in Germany.

"Those cars can be sold outside Europe if it makes sense," Akerson said adding it was "a time of challenge but also of excitement and optimism".

Workers have in the past reproached the US giant for its strategy of confining sales to Europe.

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US stocks rise on China trade numbers

US stocks opened higher on Wednesday after China posted a surprising increase in its trade deficit.

Five minutes into trade, the Dow Jones Industrial Average rose 73.22 (0.50 per cent) to 14,746.68.

The broad-based S&P 500 jumped 7.40 (0.47 per cent) to 1,576.01, while the tech-rich Nasdaq Composite Index increased 16.94 (0.52 per cent) to 3,254.79.

The gains came as China posted a rare increase in its trade deficit as imports exceeded exports by $880 million. The Nikkei 225 and Hang Seng indexes moved higher.

Traders appeared to look past US Federal Reserve meeting minutes that suggested the Fed was closer to ending its stimulus measures if the jobs market continues to improve. The Fed policy meeting was held before last Friday's surprisingly weak jobs report.

Briefing.com analyst Patrick O'Hare said gains on Tuesday reflected the market's confidence at its ability to withstand negative news.

"Buyers were emboldened by the market's resilience in the face of negative headlines (e.g. Cyprus, North Korea, and nonfarm payrolls) that had the potential to incite some more concerted selling interest but didn't," O'Hare said.

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UK PM leads parliament tribute to Thatcher

BRITISH Prime Minister David Cameron has led parliament in a special session of tributes to Margaret Thatcher, describing the divisive former leader as an "extraordinary" woman who had revived the country's fortunes.

The Iron Lady's harshest critics stayed away in a sign of her bitterly disputed legacy, but the Houses of Commons and Lords were mostly packed full of MPs recalled from their holidays after Thatcher died on Monday aged 87.

"Let this be her epitaph, that she made this country great again," intoned Cameron, a fellow Conservative.

Hailing her as an "extraordinary leader - and an extraordinary woman", Cameron said Thatcher was also renowned internationally for helping defeat communism during the 1980s and ending the Cold War.

"Today, in different corners of the world, there are millions of people who know that they owe their freedom, in part, to Margaret Thatcher," Cameron said.

Supporters say Thatcher's free-market reforms made Britain stronger and hail her leadership during the Falklands War with Argentina, while critics complain her economic policies and battles with the trade unions destroyed millions of lives.

But opposition Labour leader Ed Miliband acknowledged her impact on Britain.

"Whatever your view of her, Margaret Thatcher was a unique and towering figure," he said in answer to Cameron's comments.

Thatcher's son Mark said his twin sister Carol and the rest of their family had been "overwhelmed" by messages of support they had received from around the globe. Their mother died at London's Ritz Hotel after a stroke.

Mark said that Thatcher would have been "greatly honoured" by Queen Elizabeth II's decision to attend her funeral next Wednesday, a rare honour from the monarch only accorded to Winston Churchill.

The ceremony will be held at St Paul's Cathedral in London, where British armed forces personnel from units associated with the Falklands conflict will bear her coffin. A total of 700 military personnel will be involved.

Cameron said her casket would also be draped with the British flag as it was transported on a gun carriage to the cathedral, saying: "This will be a fitting salute to a great prime minister."

The parliamentary session was largely respectful but several of her biggest critics boycotted the debates.

"Her impact and influence is indisputable, but her legacy is too bitter to warrant this claim to national mourning," said one Labour lawmaker who stayed away, John Healey.

Firebrand left-wing lawmaker George Galloway also said he would stay away from what he derided as a "state-organised eulogy".

Security for the funeral is likely to be extremely tight with fears of disruption by Irish republican dissidents and far-left groups. Police are also reportedly bracing for a possible "lone wolf" attack.

Concerns about potential violence rose after trouble erupted at several street parties celebrating her death on Monday night in London, Liverpool, Bristol and Glasgow.

Many world figures are expected to attend Thatcher's funeral, although a spokesman for former Soviet leader Mikhail Gorbachev said he would not be among them because his health was too frail.

Former Labour prime minister Tony Blair and his wife were among the first confirmed guests to the ceremony, which will be followed by a private cremation.

Thatcher's ashes will be laid next to those of her husband Denis, who died in 2003, at the Royal Chelsea Hospital.

Mark Thatcher was out of the country when his mother died, as was his sister, but he returned overnight to the family's plush central London townhouse, where well-wishers had left flowers and tributes.

"We have quite simply been overwhelmed by messages of support, condolence, of every type from far and wide and I know that my mother would be pleased they have come from people of all walks of life," the 59-year-old told reporters.

Several Conservative MPs have called for Thatcher to receive a full state funeral but her spokesman Lord Tim Bell said Thatcher had specifically asked not to have one.

The government dismissed criticism over the cost of the ceremony, which is less ostentatious than the state funeral given to Churchill but is the same honour afforded to the Queen Mother and Princess Diana.

"I think we can afford to contribute to a funeral," Foreign Secretary William Hague told the BBC.

Thatcher and her policies, dubbed "Thatcherism", remain as divisive now as they were during her premiership from 1979 to 1990.

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France acquits mum over son's Jihad shirt

A COURT in southern France has acquitted a mother on trial for dressing her three-year-old son in a T-shirt reading "I am a bomb" and "Jihad, Born on September 11."

Bouchra Bagour, 35, was on trial in Avignon on charges of defending terrorism after sending her boy, named Jihad, to his school in the town of Sorgues wearing the T-shirt.

Bagour and her 29-year-old brother Zeyad, who was also charged and acquitted, had faced up to five years in prison and a fine of 45,000 euros ($A56,520) if convicted.

The court ruled on Wednesday that prosecutors had not proven that the defence of terrorism was "unequivocal", as required by the law.

"I am delighted, it was a discerning and legally justified decision that should put an end to this unfortunate affair," said Gaele Guenoun, the lawyer for Bagour, who was not present for the ruling.

Bagour had admitted to the court that sending her child to school wearing the T-shirt had been "tactless" but insisted it was not meant as a provocation.

She said she simply wanted to make note of her son's birthday on September 11 and did not intend to reference the 9/11 attacks in the United States in 2001.

Her brother, who had also faced charges for having bought Jihad the T-shirt, said after the ruling that he was "happy" and "relieved".

Sorgues Mayor Thierry Lagneau, who had expressed outrage at the incident, said the court ruling did not reflect the wishes of the local community.

"I have the feeling that the law does not reflect reality as it is seen by citizens," he said, adding that the ruling "gives the impression that everything is allowed."

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US growth to pick up 3.2% in 2014: Obama

TO Republican mockery, President Barack Obama rolled out a $US3.77 trillion ($A3.61 trillion) budget on Wednesday that laid out his battle lines in a new fiscal showdown in Washington but irked some liberal allies.

Obama said his blueprint for fiscal year 2014 would shield the middle class by closing tax loopholes that help the rich, would grow the economy, cut the deficit, train future American workers and protect seniors.

"For years, the debate in this town has raged between reducing our deficits at all costs and making the investments necessary to grow our economy," Obama said on an unseasonably warm morning in the White House Rose Garden.

"This budget answers that argument, because we can do both. We can grow our economy, and shrink our deficits."

Republicans however immediately rejected Obama's plans. Senate Minority Leader Mitch McConnell branded them as a "left wing wish list."

House Speaker John Boehner, who has already passed a Republican budget that slashes spending, warned that Obama had already made life tough enough on the rich, adding: "we don't need to be raising taxes on the American people."

Obama's spending plan for 2014 is in many ways an academic exercise, given that it has no chance of being fully enacted in stalemated Washington.

But it will stand as his entry in the latest fast-building showdown pitching the president's plan to hike taxes on the most well off against Republican plans to slash government spending with no new revenues.

"We don't view this budget as a starting point. This is an offer where the president came more than half way towards the Republicans in an attempt to get a fiscal deal," said a senior White House official.

"Are Republicans going to be willing to come to us?" the official asked, ahead of the unveiling of the budget at a time hope has faded for a "grand bargain" deal on the deficit between Obama and Republicans.

The blueprint included one key concession to Republicans, which has already angered elements of Obama's liberal Democratic base.

Obama signalled he is ready to modify some cherished entitlement social programs, by adjusting cost of living adjustments that could trim benefits for some senior citizens.

The move, ahead of a second dinner between Obama and Republicans at the White House later Wednesday, was intended to try to lure some support for cross party budget and deficit talks.

The White House is billing the budget as a document which proves that the need to cut voluminous deficits does not need to be achieved by savage cuts in government spending and social programs envisaged by Republicans.

Officials say the plan includes $1.8 trillion of deficit reduction over 10 years and would raise $580 billion dollars in new revenue by curbing income tax breaks for the rich, without raising rates.

It would raise the tax on a pack of cigarettes from $1.01 to $1.95 per pack to finance an early childhood education scheme.

The budget would also provide $1.65 billion for the Global Fund to Fight AIDS, Tuberculosis and Malaria and $4 billion to allow security upgrades following the attack on the US consulate in Benghazi last September.

Republicans dispute Obama's deficit reduction figures, arguing that since the budget would dispense with $1.2 trillion in automatic spending cuts, which began in March and are known as the sequester, its real deficit reduction figure would only be $600 billion in savings.

Among measures that had already been opposed by Republicans, the Obama budget would implement the "Buffett Rule," which would mandate that households making more than a million dollars a year pay at least 30 per cent of income in taxes.

The budget foresees a deficit of $744 billion, or 4.4 per cent of GDP, in 2014 - down from a projected deficit of $973 billion this year.

Officials projected that the shortfall would reach 2.8 per cent of GDP by 2016 and 1.7 per cent by 2023.

The plan assumes unemployment will average 7.2 per cent next year, down from the current 7.6 per cent.

Economic growth meanwhile is predicted to pick up to 3.2 per cent next year, from 2.3 per cent this year.

The White House says that the plan represents more than two dollars in spending cuts for every one dollar of new revenue accrued from closing tax loopholes.

It also includes $400 billion in health savings that administration officials say could be found by cracking down on fraud.

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Dane cleared of crimes due to 'sexsomnia'

A DANISH man has been acquitted of molesting two 17-year-old girls after he was found to suffer from a rare sleep disorder known as "sexsomnia".

The Glostrup court said Wednesday that the man fondled the teenagers while sleeping in his suburban Copenhagen apartment after a party in 2011.

The girls awoke and interrupted the man, and later reported him to police.

But the court cleared the 31-year-old of sex crimes charges, saying medical tests show he suffers from "sexsomnia" in which a person engages in sexual activity while asleep.

Michael Laub, a Danish sleep specialist who wasn't involved in the case, said it's a rare but widely recognised sleep disorder.

The defendant said he had no recollection of what happened.

Prosecutor Martin von Buelow said he wouldn't appeal the ruling.

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Google expands superfast internet in US

WHILE Australians debate the merits of faster broadband, Google is extending its "super-fast" service to Texas.

Google Fiber debuted in Kansas City and in November began providing users there with internet service that moves data at a blazing gigabyte per second.

That's about 100 times faster than the speed provided by typical broadband connections in the US.

Meanwhile, in Australia, Labor's planned $44 billion national broadband network (NBN) aims to offer speeds of 100 megabits per second (Mbps).

The coalition plans a $29.5 billion NBN with speeds of 25 Mbps.

In the US, Google plans to extend its "gigabit" experimental internet service to Austin, the Texas state capital and a hotbed for internet entrepreneurs, by the middle of next year, says vice president of access services Milo Medin.

"It's a mecca for creativity and entrepreneurialism, with thriving artistic and tech communities, as well as the University of Texas and its new medical research hospital," Medin said of Austin.

"We're sure these folks will do amazing things with gigabit access."

The announcement was greeted immediately with a challenge from telecom giant AT&T, which said it would offer a similar service if it gets the same access as Google.

"When the startup community hears about Google Fiber coming to Austin there may be celebration in the streets," said Eugene Sepulveda, chief executive of the Entrepreneurs Foundation in that city.

Google says pricing details for the service are being worked out but are expected to be on par with those in Kansas City, where gigabyte-speed service is available for a monthly fee of $US70 ($A67).

Slower Google Fiber connection to the internet is made available free, after a one-time "construction fee" of $US300.

Consumers also will have an option to pay $US120 monthly for superfast internet combined with Google TV service that syncs with notebooks, smartphones or tablets powered by Android software backed by the California technology titan.

Google will hook schools, hospitals, community centres and other public facilities to Fiber for free, according to Medin.

"I don't think, probably, any Austinite can tell you what Google Fiber will mean to Austin a year from now, and that is really the cool part," Texas state Senator Kirk Watson said in a video posted at Google's blog.

Aspiring tech tycoons, their potential financiers, plus indie film-makers and musicians of all generations and genres flock by the thousands to Austin each year for a pop culture jamboree known as SXSW.

AT&T responded to the challenge from Google by announcing that it is prepared to build an advanced fibre optic network in Austin, provided it gets the same deal as Google did from local officials.

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