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European stocks slip on caution about recovery

 A TV reporter reports in front of an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009 as Japan's Nikkei 225 stock average rose 14...
 A man watches an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009. Asian stocks posted modest gains Wednesday, lifted by rising U...

Japan Markets

A TV reporter reports in front of an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009 as Japan's Nikkei 225 stock average rose 14...

Japan Markets

A man watches an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009. Asian stocks posted modest gains Wednesday, lifted by rising U...

European stocks edged lower on Wednesday as upbeat German and U.S. economic data were enough to convince investors that the global recovery can last beyond the short-term. Asian shares rose.
Germany's DAX was down 20 points, or 0.4 percent at 5,537.05, while Britain's FTSE 100 eased 12.56 points, or 0.3 percent, to 4,904.24. France's CAC-40 edged down 4.62 points, or 0.1 percent, to 3,675.99.
Asian markets had risen earlier, catching up with Tuesday's world gains after the release of U.S. data showing an increase in American house prices and consumer confidence.
Wall Street futures predicted timid gains on the open Wednesday. Dow futures were up 36 points, or 0.4 percent, at 9,559.00 while S&P futures rose 0.6, or 0.1 percent, to 1,026.70.
Analysts said investors remain cautious about the global economic outlook and have yet to be convinced that a strong recovery is underway. Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong, described overall market sentiment as lackluster.
"Especially when it comes to long-term growth, there are still many question marks," he said. "So most investors are just trying to wait and see whether the news in the future will be positive or negative."
Germany's business confidence rose for a fifth consecutive month in August, according to the Ifo survey released Wednesday. Its closely watched index rose to 90.5 points from 87.4 points in July, about as expected and confirming Europe's largest economy is on the mend.
"The index is now back to its pre-Lehman level," said Frederik Ducrozet, economist at Credit Agricole in Paris, referring to the collapse of the U.S. investment bank last September.
He said confidence "is likely to continue to rise in the coming months" as improvements look more solid and broad-based than earlier this year.
Still, the data gave little support to stock markets, "maybe because the market is slowly becoming 'used' to good European data," Ducrozet said.
He noted that central banks have warned that recovery will not be a smooth ride, particularly since unemployment is expected to continue to rise, making investors hesitant to buy too much into rallies.
In China, traders held similar doubts. Beijing is in the midst of a two-year, 4 trillion yuan ($586 billion) effort to boost domestic consumption by pumping money into the economy. Economic growth accelerated to 7.9 percent in the latest quarter, but weak corporate profits and other areas suggest that a recovery is not firmly established.
Helped by overnight gains in the U.S., Hong Kong's Hang Seng Index rose 0.1 percent to 20,456.32 while the Shanghai Composite Index jumped 1.8 percent to 2,967.59.
Japan's Nikkei 225 stock average climbed 1.4 percent to 10,639.71. Shares of Toyota Motor Corp. advanced 1.5 percent after the world's biggest automaker announced its latest production cuts, spurring investor hopes for better efficiency and profits.
Toyota has been re-examining its global strategy after reporting its worst-ever loss for the fiscal year ended in March. It will suspend production at one of two lines at a factory in central Aichi prefecture, Japan from spring of next year until the second half of 2011, lowering its overall capacity by 220,000 vehicles, spokesman Paul Nolasco said.
Benchmarks in South Korea, Singapore, Australia and New Zealand also rose. Taiwan was the region's only major decliner, falling 1.3 percent.
In the U.S. on Tuesday, the Dow Jones index rose 30.01, or 0.3 percent, to 9,539.29. The Standard & Poor's 500 index rose 2.43, or 0.2 percent, to 1,028.00, while the Nasdaq composite index rose 6.25, or 0.3 percent, to 2,024.23.
Crude oil prices rose in European electronic trade, with benchmark crude for October delivery up 25 cents at $72.30. The contract fell 3 percent overnight.
The dollar slipped to 93.95 yen from 94.19 yen while the euro rose to $1.4315 from $1.4301.
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Associated Press writer Tomoko A. Hosaka in Tokyo contributed to this report.


Updated : 2021-03-06 08:07 GMT+08:00