World stock markets up modestely but British pound takes another hit after poor industry data

World stocks up modestly; pound takes another hit

LONDON — World stock markets mostly rose Wednesday, though trading was choppy as investors looked for direction a day after the one-year anniversary from recession-related lows. The pound meanwhile continued to decline after disappointing industrial production figures.

In Europe, the FTSE 100 index of leading British shares closed up 38.27 points, or 0.7 percent, to 5,640.57 while Germany’s DAX rose 50.83 points, or 0.9 percent, to 5,936.72. The CAC-40 in France ended 33.54 points, or 0.9 percent, higher at 3,943.55.

The tone on Wall Street was also solid but unspectacular — the Dow Jones industrial average was up 23.81 points, or 0.2 percent, at 10,588.19 around midday New York time while the broader Standard & Poor’s 500 index rose 6.75 points, or 0.6 percent, at 1,147.20.

With little economic data released since last week’s better-than-expected U.S. jobs report, investors haven’t made any big moves — more will come over the rest of the week including U.S. retail sales and consumer sentiment figures, which should shine a light on the state of consumption in the U.S. The state of the U.S. consumer is particularly important for the U.S. economy as retail spending accounts for around 70 percent of the world’s largest economy.

Philip Gillett, a sales trader at IG Index, said markets are generally “parked in neutral for the time being” as investors wait for clear signs that “we’re not due a sharp drop of a few hundred points first.”

Tuesday marked the one-year anniversary since many of the world’s major markets hit their lows.

“Investors will be biding their time and looking for direction now that the previous rally — notable for its speed and impressive progress — has very much ended,” said Gillett.

The news earlier that Chinese exports soared nearly 46 percent in February from a year earlier did little to prompt any sustained buying in the Asian session. Though they stoked hopes that global demand was recovering, the figures reinforced fears that the Chinese monetary authorities may raise interest rates or reserve requirements for banks. Shanghai’s main stock market actually ended 0.7 percent lower at 3,048.93.

Much of the interest Wednesday centered on Britain after Prime Minister Gordon Brown confirmed that the annual budget statement will be on March 24, meaning that it’s even more likely that the British general election will be on May 6 — election campaigns usually last a month or so in Britain.

“How having a budget that close to an election at a time when there is no room for fiscal largesse can be good for the Labour’s chances of winning the election escapes me,” said Kit Juckes, chief economist at ECU Group.

“At least the timetable is getting clearer, however, and the massive cloud of uncertainty over the U.K. will lift before too long,” he added.

The pound traded 0.3 percent lower at $1.4955, having earlier dropped to $1.4871 following the news that the recovery in Britain’s industrial sector ground to a halt in January. Official figures showed that industrial production fell by 0.4 percent during the month, with manufacturing output down by an even greater 0.9 percent.

Though the industrial sector only accounts for around 18 percent of the British economy, the figures reinforced fears that the British economy may contract again in the first quarter of the year following grim trade data on Tuesday.

“These data are likely affected by poor weather; nevertheless they severely dampened the optimism produced by recent surveys which had suggested that the sector was improving,” said Jane Foley, research director at Forex.com.

The pound has been undermined in recent weeks by growing concerns about the upcoming general election following the closing of the gap between the opposition Conservative Party and the governing Labour Party in a raft of opinion polls. Investors are worried that an unclear election outcome where no one party gets an overall majority may stymie attempts to get borrowing down.

On Tuesday, Fitch Ratings said Britain’s triple A rating was merited but it did warn that more needs to be done by the next government to get a handle on the budget deficit, which is poised to be around 12 percent of the country’s gross domestic product this year — not far off from Greece’s levels.

The euro was up 0.5 percent at $1.3662 while the dollar rose 0.8 percent to 90.67 yen.

Earlier in Asia, Japan’s Nikkei 225 stock average shed 3.73 points to 10,563.92, while Hong Kong’s Hang Seng ended flat at 21,208.29.

Elsewhere, South Korea’s benchmark rose 0.1 percent and Australia’s market was almost unchanged.

Oil prices rose, with benchmark crude for April delivery up $1.49 at $82.98 a barrel.

____

AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.