BANGKOK (AP) — Global stock markets posted muted gains Thursday after China's inflation rate eased, adding to hopes that Beijing will do more to stimulate the world's No. 2 economy.
China said its consumer price index rose 1.8 percent in July, down from the previous month's 2.2 percent and well below last year's highs. Lower inflation gives Beijing more room to cut interest rates or take other steps to shore up economic growth that has slowed sharply this year, analysts said.
Wall Street appeared headed for a higher opening. Dow Jones industrial futures rose 0.1 percent to 13,139 and S&P 500 futures were marginally higher at 1,398.70. European shares were mixed after a raft of negative economic news Wednesday signaled a deepening slowdown in the region.
Britain's FTSE 100 rose 0.1 percent to 5,849.14. Germany's DAX lost 0.3 percent to 6,947.43 while France's CAC-40 rose 0.1 percent to 3,441.93.
Stocks remained resilient in Asia. Japan's Nikkei 225 rose 1.1 percent to close at 8.978.60. Earlier in the session, it surpassed the 9,000 level for the first time since July 6.
South Korea's Kospi jumped 2 percent to 1,940.59. Hong Kong's Hang Seng added 1 percent to 20,269.47. Australia's S&P ASX/200 fell 0.1 percent to 4,308.30. Benchmarks in Taiwan, Indonesia and New Zealand also gained.
On the Chinese mainland, the Shanghai Composite Index rose 0.6 percent to 2,174.10. The smaller Shenzhen Composite Index added 1.5 percent to 909.69.
Inflation is politically dangerous for China's leaders, since rising prices for food and other necessities carries the potential for unrest among tens of millions of poor families that spend up to half their incomes on food. Inflation also erodes economic gains that help underpin the Communist Party's claim to power.
Jackson Wong, vice president at Tanrich Securities, said that while the inflation data raises the likelihood of stimulus measures, it also raised fears that deflation — falling prices, which undermine company earnings — could take hold, which would cause manufacturers to delay orders and consumers to put off shopping.
"Deflation is really bad for the market because everyone would postpone purchases because prices are getting cheaper. That would significantly derail the economy," he said.
Among individual stocks, Japan's Nikon tumbled 8.1 percent after the company revised its operating profit outlook down for the business year ending March, Kyodo News agency said.
Steelmakers posted solid gains. Japan's JFE Holdings rose 4 percent and Nippon Steel added 1.8 percent. South Korea's POSCO gained 2.4 percent.
Benchmark crude for September delivery was down 6 cents to $93.29 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents to finish at $93.35 per barrel in New York on Wednesday.
The euro fell to $1.2343 from $1.2356 late Wednesday in New York. The dollar was unchanged at 78.52 yen.
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