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Stocks waver as Bernanke boost fades

Elaine Kurtenbach, AP Business Writer

An investor gestures at a private securities company in Shanghai, China, Thursday, July 18, 2013. Asian stocks were mostly higher Thursday, tracking overnight gains in Europe and Wall Street after U.S. Federal Reserve chairman Ben Bernanke's suggested stimulus policies may continue for longer than expected. (AP Photo)

TOKYO (AP) -- Share markets were muted Thursday as uncertainty over China's economic outlook overshadowed optimism from the U.S. Federal Reserve's reassurances it will extend its stimulus policies if necessary.

Market players were watching for more clues regarding future Fed policy, as the initial enthusiasm over written testimony by Fed Chairman Ben Bernanke to the U.S. Congress on central bank thinking wore thin.

In early European trading, the FTSE 100 index of British shares rose 0.1 percent to 6,579.96. Germany's DAX fell 0.3 percent to 8,228.14 and the CAC-40 in France edged 0.2 percent lower to 3,871.09.

Futures augured lackluster trading on Wall Street, with S&P 500 futures barely changed and Dow futures down 0.1 percent.

In Asia, Japan's Nikkei 225 rose 1.3 percent to 14,808.50, its highest close in two months, but gains elsewhere in the region were much more modest. Australia's S&P/ASX 200 added 0.2 percent to 4,993.40. Shares in Indonesia, Malaysia, Thailand, India and Singapore were also higher.

But China-related shares were mostly lower, reflecting gloom over news earlier in the week that the world's second-largest economy posted its second straight quarter of slower economic growth in April-June.

Hong Kong's Hang Seng shed early gains to fall into negative territory, losing 0.1 percent to 21,345.22. Benchmarks in mainland China and Taiwan also were lower. The Shanghai Composite dropped 1.1 percent to 2,023.40.

"The slowdown of growth in China is still the main concern," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. In his prepared remarks to lawmakers in Congress, Bernanke said the Fed's timetable for reducing its bond purchases was not decided and that the U.S. central bank could even boost them if the economy fails to meet expectations.

The Fed wants to see substantial progress in the job market before scaling back its $85 billion a month in purchase of government bonds and other financial assets, he said.

Expectations the Fed might start tapering off its stimulus in September caused panic last month. But recent disappointing economic data has cast doubt over the likelihood of any major changes in the near future.

Wall Street was reassured by Bernanke's comments. The Dow Jones industrial average held steady at 15,470.52 on Thursday while the broader S&P 500 index rose 0.3 percent to 1,680.91.

Benchmark crude for August delivery was down 16 cents at $106.32 in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents to settle Wednesday at $106.48.

In currencies, the euro fell to $1.3111 from $1.3117 late Wednesday. The dollar rose to 100.06 yen from 99.62 yen.