In-focus

Business

World stocks mixed amid Fed hopes, Europe concern

Dunya News

Markets were mixed Tuesday as investors hoped Federal Reserve would signal new measures.

But concern over Greeces ability to form a stable government and Spains rising borrowing rates kept investors on edge.By the afternoon, Britains FTSE 100 was up 1.3 percent to 5,561.75 and Germanys DAX added 0.9 percent to 6,306.76. Frances CAC-40 rose 0.6 percent to 3,086.23.U.S. futures opened higher ahead of a Federal Reserve meeting which is expected chart a course for the U.S. economy. Dow Jones industrial futures rose 0.6 percent to 12,815 while S&P 500 futures were 0.1 higher at 1,344.It was unclear whether the Fed would take any new action when its two-day meeting ends Wednesday. Many expect the central bank to extend a program in which it sells short-term bonds to buy long-term ones. The Fed could also launch a new round of bond buying aimed at lowering mortgage rates, although the impact of such a move on markets was unclear.Analysts said that, overall, the Fed was likely to provide some form of support to market confidence as the U.S. economy continues to struggle and Europes debt crisis rages on.A weekend electoral victory by Greek conservatives, who favor upholding an austerity program that their country entered into for an international bailout, only temporarily relaxed fears of a chaotic exit by Greece from the euro.The next crucial question for the country, which is expected to form a government this week, will be whether it can ease some of its austerity terms. Several European officials have said its necessary but Germany has so far opposed such a move.Besides Greece, the focus was also on Spain, whose borrowing costs surged this week above the 7 percent level that had forced other European countries to seek international help. The rate reflects what return investors are willing to accept when a country auctions its bonds.On Tuesday, interest rates on short-term Spanish debt soared past 5 percent in an auction that raised €3.39 billion ($4.28 billion). Worries about Spains ability to repay its debt grew last week, when the country agreed to accept a eurozone loan of up to €100 billion to shore up its ailing banks, which are sitting on massive amounts of soured real estate investments.The higher bond rate, however, was largely as expected, helping Madrids IBEX 35 index to rise 1.8 percent, in line with the broader market.Investors were eyeing the Group of 20 summit of world leaders in Mexico for signs they would boost economic growth or find solutions to the European crisis.Analysts at Credit Agricole warned that market patience with Europes troubled economies was running out and that any G-20 statements or commitments to boost IMF resources will do little to ease tensions.The International Monetary Fund said Monday that it raised $456 billion to fight the financial crisis after emerging economies such as China, Brazil and Russia pledged to expand their funding of IMF funds.Earlier, Asian stocks mostly closed lower. Japans Nikkei 225 index fell 0.8 percent to 8,655.87 while Australias S&P/ASX 500 lost 0.3 percent. South Koreas Kospi dropped 0.3 percent. Benchmarks in mainland China and Taiwan fell.Benchmark oil for July delivery added 77 cents to $84.04 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 76 cents to finish at $83.27 per barrel.In currencies, the euro rose to 1.2648 from $1.2580 late Monday in New York. The dollar fell to 78.89 yen from 79.13 yen.