World stocks mixed, China tightening worries weigh

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BANGKOK (AP) — World stocks were sluggish Monday, weighed down by caution amid a slew of earnings reports this week and expectations China will move fast to control its galloping economy.

Oil prices hovered above $89 a barrel with gains tempered by mixed stock markets in Europe and Asia. In currencies, the dollar was higher against the yen and the euro.

In early European trading, Britain’s FTSE 100 was up 0.1 percent to 5,904.31. France’s CAC-40 was flat at 4,016.82. Germany’s DAX was down 0.2 percent to 7,047.44.

Wall Street was set to head for a muted open ahead of busy week of quarterly earnings reports. McDonald’s Corp., American Express Co. and Texas Instruments Inc. were among companies scheduled to report earnings Monday. Dow futures were little changed at 11,834 and S&P 500 futures rose 0.1 percent to 1,280.70.

Japan’s benchmark index snapped a two-day losing streak as investors hunted for bargains. The Nikkei 225 closed up 0.7 percent to 10,345.11. Honda Motor Co. led the country’s top three automakers higher after a ratings upgrade from Nomura Securities Co. Its shares jumped 3.8 percent, while rival Toyota Motor Co. added 1.3 percent.

Australia’s S&P/ASX 200 rose 0.6 percent to 4,786. South Korea’s Kospi added 0.6 percent to 2,082.16. Benchmarks in India and Singapore also rose.

But elsewhere, markets were lagging. Hong Kong’s Hang Sang dropped 0.3 percent to 23,801.78. Banking shares were among the decliners, including Bank of China, which dropped 1.4 percent, and HSBC, down 0.4 percent.

The Shanghai Composite index fell 0.7 percent to 2,695.72 and the Shenzhen Composite Index for China’s smaller, second market shed 2.4 percent to 1,150.04.

Markets in Taiwan, Indonesia, Thailand and New Zealand also fell.

Investors remained wary following the release of economic indicators last week showing that China’s communist leadership had yet to get economic growth under control, leading analysts to predict that Beijing would take more aggressive steps to tamp down inflation and slow the economy.

“There is fear that China might tighten monetary supply because last week the economic data showed that China’s economy is still overheating … runaway property prices, runaway inflation,” said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

Figures last week showed growth picked up in the fourth quarter, to 9.8 percent from 9.6 percent in the previous quarter. The government also reported the inflation rate at 4.6 percent in December. But Lun said he believes inflation is much higher than that.

“Never trust China’s official economic data. No one believes them. You must be living on the moon if you think it’s 4.6 percent,” he said. “Inflation in mainland China is more like 10 percent.”

That, at least, is the perspective from Hong Kong, where busloads of mainland Chinese shoppers come daily for routine items like shampoo and milk power, Lun said.

“China is not a cheap place to manufacture any more,” he said. But one factor preventing companies from moving to India, Lun said, are its labor regulations — regarded as much more onerous than those in China.

Wall Street ended the week Friday on a mixed note. The Dow Jones industrial average rose 49.04 points, or 0.4 percent, to close at 11,871.84, helped by strong profits at General Electric Co. The Standard & Poor’s 500 index gained 3.09 points, or 0.2 percent, to 1,283.35.

In currencies, the dollar rose to 82.84 yen from 82.60 yen late Friday. The euro fell to $1.3572 from $1.3602.

Benchmark crude for March delivery was up 20 cents at $89.31 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 48 cents to settle at $89.11 on Friday.

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