World stocks drift as Japan, China benchmarks pull back early gains

Energy Associated Press

Global stock markets drifted higher Wednesday after Chinese business surveys offered some optimism about the world's No. 2 economy.

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KEEPING SCORE: France's CAC 40 edged 0.2 percent higher to 4,394.82 and Germany's DAX rose 0.2 percent to 9,957.70. Britain's FTSE 100 was little changed. U.S. shares were poised to open flat, with Dow and S&P 500 futures almost steady.

US DATA: Investors are awaiting monthly reports due later in the day that will give the latest update on the world's No. 1 economy, including a survey of payrolls by private employers by ADP and the ISM index of non-manufacturing activity.

CHINA SERVICES: Shanghai shares jumped in early trading after two monthly surveys showed that activity in the No. 2 economy's service industries edged higher. The results of an official purchasing managers' index and a similar one by HSBC, which showed that new orders rose at their fastest in two and half years, were encouraging signs after a recent string of downbeat data.

ASIA'S DAY: Japan's benchmark Nikkei 225 index ended 0.3 percent higher at 17,720.43 after surging more than 1 percent earlier in the day to briefly touch the highest level since mid-2007. South Korea's Kospi edged up 0.2 percent to 1,969.91 while Hong Kong's Hang Seng lost 1 percent to 23,428.62. The Shanghai Composite Index in mainland China gained 0.6 percent to 2,779.53 after surging as much as 2 percent earlier. Australia's S&P/ASX 200 rose 0.8 percent to 5,321.80.

YEN SLUMP: The Nikkei's rise comes as the Japanese currency falls to its lowest in seven years, with the latest catalyst coming in the form of a downgrade by ratings service Moody's to the government's credit rating. The dollar strengthened to 119.32 yen from 119.22 yen in late trading Tuesday. The weakening yen, driven by the government's monetary easing aimed at stimulating the economy, is good for the nation's big exporters such as Toyota and Canon because it makes their cars and electronics cheaper overseas.

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ENERGY: Oil prices rebounded, with benchmark U.S. crude rising 70 cents to $67.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.12 to settle at $66.88 a barrel on Tuesday. Brent crude, used to price internationally, rose 65 cents to $71.19 on the ICE Exchange in London.

CURRENCIES: The euro slipped to $1.2339 from $1.2384.