The Deal) -- European and Asian markets were generally in a cautiously positive mood Tuesday morning, boosted by a variety of factors, but all with the caveat that the good news generally arose from hoped-for government or central bank attempts to arrest underlying economic decline.
In Australia, the government abolished a controversial tax on iron ore and coal mining profits, just as it emerged that weaker demand for commodities helped the country's current account deficit almost to double in the second quarter. The central bank there also indicated it would maintain a loose monetary policy for now.
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In Japan, unexpectedly high wage growth helped suggest the government's anti-deflationary efforts might be working after all. But analysts also argued that most other indicators had shown the opposite and it was partly also the fall in the value of the Japanese yen against the dollar that pushed the export stock focused Nikkei 225 up 1.24% to close at 15,668.6.
In the eurozone, the attention was squarely focused on Thursday's meeting of the European Central Bank and hopes of moves toward a policy of quantitative easing. Deflation fears in the eurozone were further stoked Tuesday by the issue of Eurostat figures showing industrial production prices had fallen in July both in the zone and in the wider European Union. That was led by the generally welcome fall in energy prices, but, following Monday's falls in manufacturing data, still leaves the market warily looking to policy makers for stimulus.
But the removal of Australia's mining tax boosted big mining companies such as Rio Tinto
and BHP Billiton
which make up a big part of London's FTSE 100. Rio Tinto was up 0.93% at 3,261.0 pence, while BHP was up 1.34% at 1,930.5 pence. Glencore was up 1.63% at 367.75 pence.
The other big riser in London was the construction industry, which has undergone a recovery as the U.K. economy picks up and has also benefited from government housing policy stimulus, as well as infrastructure growth and commercial building. Construction output rose at its fastest pace for seven months last month, according the purchasing managers' index compiled by Markit Economics and CIPS. Mid-cap homebuilder Redrow
announced a 92% increase in pretax profit, although its share price rose just 0.04% to 281 pence and its rival Barratt Developments
was actually among the biggest fallers, down 1.17% at 364.5 pence.
The FTSE 100 was up 0.23% at 6,841 while in Paris the CAC40 was up 0.40% at 4,397, having breached the 4300 mark earlier in the session. In Frankfurt, the DAX was up 0.88% at 9,562 while in Moscow the MICEX Composite was up 0.19% at 1,397.