Asia Stocks Waver

By Kay Johnson, AP Business Writer

BANGKOK (AP) -- Asian stock markets were mixed Wednesday as investors weighed expectations of robust U.S. corporate earnings against weak trade figures from China.

While good economic news out of the U.S. has sparked gains in some markets this week, Asian stocks continue to be weighed down by signs that China's era of breakneck economic growth above 10 percent is over.

Tokyo's Nikkei 225 index was down 0.4 percent to 14,416.60, while Hong Kong's Hang Seng gained 1 percent to 20,884.50.

The Sensex index in India edged 0.1 percent lower to 19,417.39 and South Korea's Kospi dropped 0.3 percent to 1,824.16. Australia's S&P/ASX rose 0.4 percent to 4,901.40.

In a new sign of weakness in the world's second-largest economy, China's exports fell by 3.1 percent in June compared with a year earlier and imports contracted by 0.7 percent, customs data showed Wednesday.

China's economic expansion is expected to slow further due to weak global demand and an effort by the Chinese central bank to cool a credit boom. The International Monetary Fund on Tuesday scaled back its China 2013 growth forecast to 7.8 percent from 8.1 percent.

Paradoxically, China's Shanghai Composite surged 1.9 percent to 2,004.10 after falling the previous two days.

Despite the weak trade report, Chinese investors are optimistic about the future because of good economic news from the U.S., said Peng Yungliang, an equities analyst at Morgen Assets.

"The U.S. is the biggest export market for Chinese companies, so investors expect that with the economy picking up there, it will mean increased demand and increased exports in the future to the U.S.," Peng said.

In the U.S. and Europe, stocks have been buoyed by expectations that corporate earnings will remain at record levels and confirmation that Greece would get its next batch of bailout cash.

The Dow Jones industrial average rose 0.5 percent to 15,300.34 on Tuesday, while the broader S&P 500 index gained 0.7 percent to 1,652.32 -- its best run in two months -- and the Nasdaq composite rose 0.6 percent to 3,504.26.

Markets worldwide have largely recovered since U.S. Federal Reserve Chairman Ben Bernanke last month said that the central bank planned to reduce its monetary stimulus, prompting a global selloff.

The central bank is buying $85 billion in bonds a month to keep interest rates low and encourage borrowing and spending. That stimulus has been a major factor in driving global stock markets higher.

After a few weeks of volatile trading at the prospect of the stimulus being scaled back, investors now appear to be applauding the prevailing trend of improving U.S. economic news.

The consensus in the markets is now that the Fed will first reduce the amount of financial assets it buys in September.

Wednesday's expected publication of the minutes of the last Fed policy meeting in June and an ensuing speech by Bernanke will be monitored in that context.

Benchmark crude oil for August delivery jumped 83 cents to $104.36 a barrel in electronic trading on the New York Mercantile Exchange, the highest level in more than a year.

In currencies, the euro rose to $1.2793 from $1.2780 late Tuesday in New York. The dollar fell to 100.50 yen from 101.17 yen.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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