BANGKOK (AP) — World stock markets rose Wednesday, registering approval of a German court ruling that backs the country's participation in a bailout fund created to prevent the weakest euro economies from going bust.
Germany's Federal Constitutional Court rejected a challenge to Europe's permanent rescue fund, paving the way for its ratification by Germany's president. The fund is important for resolving the European debt crisis because it can loan money to cash-strapped governments. The fund cannot work without Germany, Europe's largest economy.
European stocks rose in early trading. Britain's FTSE 100 gained 0.4 percent to 5,812.78. Germany's DAX jumped 1.1 percent to 7,389.15 and France's CAC-40 added 0.9 percent to 3,568.61.
Wall Street was set for gains, with Dow Jones industrial futures rising 0.5 percent to 13,363 and S&P 500 futures up 0.5 percent to 1,437.40.
The ruling overcame any nervousness sparked by a warning Tuesday from Moody's Investors Service that it may cut its credit rating for the United States.
The Moody's warning that it may downgrade its triple A score for the U.S. by one notch if progress isn't made next year on reducing the country's debt-to-GDP ratio had been widely-anticipated. Last year, the U.S. lost its top rating from the Standard & Poor's ratings agency. That caused markets to plunge.
Earlier in Asia, Japan's Nikkei 225 index rose 1.7 percent to close at 8,959.96. Hong Kong's Hang Seng added 1.1 percent to 20,075.39 and South Korea's Kospi gained 1.6 percent to 1,950.03. In mainland China, the Shanghai Composite Index gained 0.3 percent to 2,126.55. The Shenzhen Composite Index gained 0.5 percent to 901.29.
Also Wednesday, Federal Reserve officials will gather for a two-day meeting. Many expect the Federal Open Market Committee to Thursday afternoon announce a third round of bond purchases to revive the sluggish economy. Such action, known as quantitative easing or QE, serves to stimulate the economy by causing interest rates to fall.
"A lot of optimism is being priced into the market in that the U.S. may be doing another round of QE very soon. It has been put off for a long time," said Lee Kok Joo, head of research at Phillip Securities in Hong Kong. Stock markets for the moment were ignoring the downgrade threat from Moody's.
Among individual stocks, Japanese telecommunications equipment maker Oki Electric Industry plunged 11 percent after forecasting a bigger-than-estimated loss in connection with improper accounting at its Spanish unit, Kyodo News Agency said.
Hong Kong-listed China Eastern Airlines gained 4.7 percent after announcing it is raising $572 million by selling new shares to its state-owned parent to trim its heavy debt burden as it pursues an aggressive fleet expansion in China.
Benchmark crude for October delivery was up 48 cents to $97.65 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 63 cents to finish at $97.17 on the Nymex on Tuesday.
In currency trading, the euro rose to $1.2885 from $1.2871 late Tuesday in New York. The dollar rose to 77.88 yen from 77.78 yen.
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