World shares post muted gains amid China cau­tion

The Pak Banker - - International3 -

SEOUL: World stocks were mod­estly higher Tues­day as in­vestors re­mained on guard over Chi­nese in­ter­est rate pol­icy and di­gested news that Pres­i­dent Barack Obama's tax­cut pack­age had gained enough votes in the Se­nate.

The U.S. tax cuts and China's mon­e­tary pol­icy high­light the dif­fer­ent chal­lenges fac­ing the world's two biggest economies as they head into 2011.

Obama is try­ing to jolt the U.S. econ­omy into a stronger re­cov­ery that will cre­ate jobs and help bring down the coun­try's 9.8 per­cent un­em­ploy­ment rate. China has been tak­ing steps to curb its red-hot growth and ris­ing con­sumer prices.

China's in­fla­tion rate surged to 5.1 per­cent in Novem­ber amid higher costs for food and util­i­ties. Fi­nan­cial mar­kets are won­der­ing if an­other in­ter­est rate in­crease is com­ing fol­low­ing one in Oc­to­ber, which was the coun­try's first since the global eco­nomic cri­sis.

"Since the rate is­sue is not com­pletely clear, in­vestors are still cau­tious," Jack­son Wong, vice pres­i­dent at Tan­rich Se­cu­ri­ties in Hong Kong, said of the pos­si­bil­ity of a fur­ther in­crease in Chi­nese bor­row­ing costs.

In Europe, Bri­tain's FTSE 100 was up 0.1 per­cent to 5,863.53 and France's CAC-40 added 0.1 per­cent to 3,895.28. Ger­many's DAX slipped less than 0.1 per­cent to 7,027.89.

Wall Street was set to gain with Dow fu­tures up 15 points, or 0.1 per­cent, at 11,381.00 and broader S&P fu­tures ahead by 2.1, or 0.2 per­cent, to 1,238.00.

Ear­lier in Asia, Hong Kong's Hang Seng climbed 0.5 per­cent to 23,431.19 and China's bench­mark Shang­hai Com­pos­ite In­dex gained 0.1 per­cent to 2,927.08.

Ja­pan's Nikkei 225 stock av­er­age added 0.2 per­cent to 10,316.77. -Ap

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