World markets rise modestly amid growth worries

[August 17, 2010]  BANGKOK (AP) -- World markets mostly posted modest gains Tuesday as a steady drumbeat of bad news about the global economic recovery kept new bets on stocks in check.

After Japan on Monday became the latest major economy to report slower growth in the second quarter, a regional manufacturing report in the U.S. further disappointed investors.

Oil prices, meanwhile, edged above $75 a barrel in Asia for the first time in five days but gains were tempered by uncertainty about the strength of demand for fuel in the second half of the year.

Investors have been unnerved by figures showing the U.S. economic recovery is stumbling while China, which helped lead the world out of last year's recession, is also slowing as Beijing clamps down on credit to prevent overheating.

"The market has grown cautious as confidence in economic recovery waned. Nevertheless, an economic slowdown is unlikely to turn into a double dip recession," Daewoo Securities said in a report.

In Europe, France's CAC-40 was up 0.6 percent to 3,618.51, Britain's FTSE 100 was higher by less than 0.1 percent at 5,276.10 and Germany's DAX added 0.5 percent to 6,139.85.

Futures pointed to gains on Wall Street with Dow futures up 33 points, or 0.3 percent, at 10,306.00. Broader S&P futures advanced 4.6, or 0.4 percent, to 1,081.70.

Among the advancers in Asia was China's Shanghai Composite Index, which added 0.4 percent to 2,671.89 and South Korea's Kospi, up 0.7 percent to 1,755.03. Hong Kong's Hang Seng rose 0.1 percent to 21,137.43.

Australia's S&P/ASX 200 climbed 0.9 percent to 4,477.00. Volume was light ahead of national elections on Saturday. Markets in India, Malaysia, Thailand and the Philippines also gained.

Sustained strength in the yen magnified lackluster sentiment in Japan, where the Nikkei 225 stock average fell 34.99 points, or 0.4 percent, to 9,161.68.

Japanese exporters, whose overseas earnings shrink when the yen climbs, came under selling pressure.

Elsewhere, Singapore's index lost 0.3 percent to 2,925.94 and Taiwan's benchmark slipped 0.1 percent to 7,931.09. New Zealand's market also fell.

In New York on Monday, the Dow fell 1.14, or 0.01 percent, to 10,302.01.

The Federal Reserve Bank of New York said manufacturing activity in the state rebounded slightly this month after falling sharply in July. Despite the modest gain, activity did not expand as much as expected, indicating tepid economic growth.

The Standard & Poor's 500 index rose 0.13, or 0.01 percent, to 1,079.38, while the Nasdaq composite index rose 8.39, or 0.4 percent, to 2,181.87.

In currencies, the dollar rose to 85.25 yen from 85.15 yen late Monday. The euro climbed to $1.2886 from $1.2814.

Benchmark crude for September delivery was up 33 cents at $75.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 15 cents on Monday to settle at $75.24.

[Associated Press]

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