World stocks rise as China slowdown jitters ease
World stock markets rise as Chinese premier eases jitters over extent of slowdown
A visitor stands near "Charging Bull" statue in Shanghai, China, Monday, July 22, 2013. Asian stocks mostly gained Monday after Japan's ruling party won a majority in parliament's upper house and a mandate to push ahead economic reforms. European markets fell. (AP Photo/Eugene Hoshiko)
MILAN (AP) -- Easing fears of an economic slowdown in China pushed world markets higher on Tuesday .
World stocks received a boost after Chinese Premier Li Keqiang indicated the government would act to support the world's second-biggest economy after two straight quarters of deceleration. The premier vowed growth would not dip below 7 percent.
In Europe, the FTSE 100 index of leading British shares was up 0.3 percent at 6,642 while Germany's DAX rose 0.51 percent to 8,342. The CAC-40 in France was 0.21 percent higher at 3,948.
Li's comments to the Cabinet about economic growth allayed concerns about how much China's government would let the economy slow as it tries to shift the basis of growth toward domestic consumption and away from exports and industrial investment.
"Premier Li's latest talk contains important information and will surely clarify much confusion," analysts at Bank of America Merrill Lynch said in a report. "He could introduce a small-scale fiscal expansion by tapping the central government coffer."
China's Shanghai Composite jumped 2 percent to 2,043.88 and Hong Kong's Hang Seng surged 2.3 percent to 21,915.42.
Futures augured slight gains on Wall Street. Dow futures advanced 0.1 percent to 15,513 and S&P 500 futures added 0.2 percent to 1,693.20.
Analysts said the previous day's downbeat news on the U.S. economy was double-edged for financial markets.
On one hand, the surprising drop in sales of existing homes in June to a seasonally adjusted annual rate of 5.08 million dampened optimism about the U.S. economic recovery. But investors could also interpret the weak data as ensuring continued bond-buying by the Federal Reserve.
Japan's Nikkei 225 rose 0.8 percent to 14,778.51, its second day of gains since Prime Minister's Shinzo Abe's ruling coalition gained control of the upper house in weekend elections. That could make it easier for Abe's administration to implement reforms aimed at lifting the world's No. 3 economy out of its long slump.
In currency markets, the dollar rose to 99.91 yen from 99.32 yen. The euro dipped to $1.3176 from $1.3186.
Benchmark crude for September delivery was down 67 cents to $106.28 a barrel in electronic trading on the New York Mercantile Exchange.
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Youkyung Lee contributed from Seoul, South Korea.
