World stocks stall amid wait for Europe debt plan

BANGKOK (AP) - World stocks stalled Wednesday amid waning hopes that European leaders would quickly agree on a plan to contain a debt crisis that threatens to derail global economic growth.

Benchmark oil hovered above $83 per barrel while the dollar gained against the euro but fell against the yen.

In early European trading, Britain's FTSE 100 index fell 0.6 percent to 5,262.11. Germany's DAX dropped 1 percent to 5,572.36 and France's CAC-40 was 0.8 percent lower at 3,000.72.

Wall Street also braced for a lower opening, with Dow Jones industrial futures down less than 0.1 percent at 11,110 and S&P 500 futures slipping 0.2 percent to 1,167.60.

Shares in Asia lost steam after spending the morning in positive territory.

Japan's Nikkei 225 index eked out a gain of less than 0.1 percent to close up just 5.70 points at 8,615.65. The most sought-after shares included blue chips such as Nissan Motor Corp., which shot up 4.2 percent and Mazda Motor Corp., which was 3.4 percent higher. Panasonic Corp. gained 3.8 percent.

Australia's S&P/ASX 200 was 0.9 percent higher at 4,039.50. Benchmarks in Taiwan, Malaysia, Indonesia and the Philippines also gained. But South Korea's Kospi gave up earlier gains and closed down 0.7 percent to 1,723.09. Hong Kong's Hang Seng sank 0.7 percent to 18,011.06 while benchmarks in Singapore and Thailand also fell.

Worries about Europe have weighed on stock markets for months, and any glimmer of positive action tends to spark buying.

"Whenever there is a bit of a sense that there will be some credible action, in Europe in particular, then investors are pretty trigger happy on not wanting to miss out," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

"At the end of the day, I think everybody is very conscious of the fact that things are far from certain."

Others cautioned that if a concrete rescue plan for debt laden Greece does not emerge soon, then stocks could head right back down.

"Every time the market gets its hopes up that a solution to the eurozone crisis is near the rug gets pulled from under it," Ben Potter, market strategist at IG Markets in Melbourne, said in a research note.

"Only when we see firm action being taken, rather than hollow promises will confidence and sentiment begin to improve."

Energy and mining stocks rose as fears dissipated of a financial blowup in Europe, which could drag down economic growth across the globe and reduce demand for raw materials such as crude oil and metals.

Japanese energy explorer Inpex Corp. rose 1.1 percent and Hong Kong-listed shares of PetroChina, the country's biggest oil and gas company, gained 2.1 percent. Newcrest Mining Ltd., Australia's largest gold miner, jumped 2 percent.

A default by Greece could ripple across the globe, threatening the solvency of European banks and other financial institutions that have large holdings of the country's bonds. A default could also hurt U.S. companies which send about 20 percent of their exports to Europe.

Investment sentiment was boosted late Tuesday, when Greek lawmakers passed a controversial property tax - one of a host of painful debt-reduction measures it must undertake in exchange for rescue loans. The country will go bankrupt unless it receives an (euro) 8 billion ($11 billion) rescue loan before mid-October.

Another encouraging sign of Europe's commitment to Athens came from German Chancellor Angela Merkel, who said her country would do whatever it could to help the debt-riddled Greece.

Those signals helped boost Wall Street stocks Tuesday. The Dow rose 1.3 percent to close at 11,190.69. The Standard & Poor's 500 index rose 1.1 percent to 1,175.38. The Nasdaq composite rose 1.2 percent to 2,546.83.

In currency trading, the dollar fell to 76.44 yen from 76.75 yen late Tuesday in New York. The euro fell to $1.3602 from $1.3641.

Benchmark crude for November delivery was down 78 cents to $83.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $4.21 to close at $84.45 per barrel on Tuesday on the Nymex.

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