PAMELA SAMPSON

BANGKOK (AP) â¿¿ World stock markets were mixed Thursday as the euphoria began to wear off from a successful bond sale in Portugal that had eased worries over Europe's debt crisis.

Oil prices hovered below $92 a barrel as signs of improving U.S. demand pushed crude to a two-year high. In currencies, the dollar strengthened against the yen but was down against euro.

Stocks in Europe were largely down in early trading. Britain's FTSE 100 fell 0.4 to 6,027.24 while Germany's DAX was down 0.1 percent to 7,063.64. France's CAC-40 was up 0.1 percent at 3,946.96.

Stock markets in New York were set to open lower, with Dow futures down 0.1 percent to 11,697 and the broader S&P 500 futures index 0.1 percent lower to 1,281.70.

Stock markets have been rattled by fears that heavily indebted Portugal will become the third European country to require a bailout after Greece and Ireland.

The Portuguese government borrowed $1.6 billion in an international debt auction on Wednesday at a lower long-term interest rate than many expected, temporarily easing fears of a default.

Stocks in Asia responded positively.

"That alleviated the immediate need of going to the European Central Bank begging for help," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "It's a good thing because the immediate danger of Portugal defaulting is over. People are now looking at the brighter side."

Japan's Nikkei 225 stock average closed 0.7 percent higher at 10,589.76. Banking issues jumped, extending gains by U.S. financial stocks on hopes that banks would start raising their dividends. Sumitomo Mitsui Financial Group Inc. rose 1.7 percent, and Mizuho Financial Group Inc. was up 2.4 percent.

South Korea's Kospi was down 0.3 percent at 2,089.48 after the central bank unexpectedly hiked its key interest rate for the second time in three months in an effort to tame rising inflation.

The Bank of Korea raised its benchmark seven-day repurchase rate to 2.75 percent from 2.5 percent. The announcement came a day after a record high on the Seoul exchange.

Elsewhere, Hong Kong's Hang Seng index rose 0.5 percent to 24,238.98 and Australia's S&P/ASX 200 jumped 1.5 percent to 4,795.20.

Chinese shares rose slightly Thursday, with the benchmark Shanghai Composite Index advancing 0.2 percent, or 6.41 points, to 2,827.71 and Shenzhen Composite Index for China's smaller, second exchange up less than 0.1 percent to 1,257.32.

In New York Wednesday, the Dow Jones industrial average finished at its highest level since Aug. 11, 2008. The index rose 83.56 points, or 0.7 percent, to close at 11,755.44.

Analysts are anticipating the U.S. Labor Department's weekly jobless claims later Thursday, with a recent downward trend in unemployment benefit applications and a rebound in retail sales boosting confidence in the U.S. economy.

"The two key changes in the US economy over the past two months have been the drop in weekly jobless claims and the acceleration in consumption growth," DBS Bank in Singapore said in a research note Thursday. "Bottom line: US domestic demand continues to grow solidly and risks to GDP growth, currently estimated at 2.8 percent for 2011, are running to the upside as well."

On Wednesday, U.S. financial stocks surged on hopes that banks would start raising their dividends.

The broader Standard & Poor's 500 index also reached its highest level since Aug. 28, 2008. The index gained 11.48, or 0.9 percent, to 1,285.96. The Nasdaq composite rose 20.50, or 0.8 percent, to 2,737.33.

In currencies, the dollar rose to 83.09 yen from 83.06 yen late Wednesday. The euro rose to $1.3126 from $1.3117.

Benchmark oil for February delivery fell 2 cents to $91.84 a barrel in electronic trading on the New York Mercantile Exchange. Crude gained 75 cents to settle at $91.86 on Wednesday, the highest settlement price since October 2008.

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