World shares post muted gains amid China caution
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