World stocks mixed as China stimulus hopes fade

Chinese Premier Wen Jiabao said the government's 4 trillion yuan ($586 billion) stimulus plan, announced in November, would help the country achieve 8 percent growth this year. That rate is seen as critical to creating jobs and staving off social unrest as the worst global economic crisis in generations hits Chinese exports.

As the government boosts money for infrastructure, social programs and tax cuts, the country's budget deficit will surge to its highest level in six decades, Wen said at China's annual legislative session in Beijing.

Global markets had rallied along with commodities prices the day before, partly on hopes China would announce new steps to counter a slowdown in its economy and help other countries restart theirs in the process.

But some investors turned cautious after Beijing largely reinforced programs and spending already known.

The program outlined in Wen's nationally televised speech, while supplying a short-term jolt to confidence with its reiteration of the 8 percent growth target, was unlikely to bring about a lasting recovery in global markets, analysts said. With Western economies and the global financial system still in tatters, any spillover effects from China would be limited.

"Knowing China will be spending is comforting, but we have doubts whether this will help other countries' economies in the end," said Kelvin Lau, a regional economist at Standard Chartered Bank in Hong Kong.

After opening higher, Asian stocks started to pare their gains by the afternoon as many investors booked profits from Wednesday's rally

Japan's Nikkei 225 stock average rose 142.53 points, or 2 percent, to 7,433.49 while South Korea's Kospi ended down 0.1 percent at 1,058.18 in a choppy session.

In China, Shanghai's benchmark gained 1 percent to 2,221.08 after jumping more than 6 percent the day before. Prices were initially down after Wen's speech, but rebounded on reports of a rise in bank lending and speculation a tax on stock trading might be cut.

Hong Kong's Hang Seng lost 118.76 points, or about 1 percent, to 12,212.39. Benchmarks in Australia and Taiwan gained while Singapore and Indian stock measures fell.

As trading opened in Europe, benchmarks in Britain, Germany and France were off about 1 percent or more ahead of expected interest rate cuts from the European and British central banks. Both were expected to slash benchmark rates to new record lows.

U.S. futures pointed to a lower open on Wall Street. Dow futures were down 30 points, or 0.4 percent, at 6,800 and S&P500 futures were off 6.1, or 0.9 percent, at 702.30.

Overnight, Wall Street snapped a five-day losing streak, buoyed by China stimulus hopes as well as details of a Washington program to help as many as 9 million borrowers stay in their homes through refinanced mortgages or loans.

The Dow Jones industrial average rose 149.82, or 2.2 percent, to 6,875.84. Broader indexes also rose. The Standard & Poor's 500 index added 16.54, or 2.4 percent, to 712.87.

Investors in Asia and beyond are likely to pay close attention to Friday's release of U.S. employment figures, a key baramoter of the world's largest economy and the health of consumers whose spending is critical to Asia's export-driven economies.

In Japan, the sinking yen helped some carmakers and technology companies reliant on overseas demand. Mazda Motor Corp. shot up 10.5 percent, while Nissan Motor Co. rose 6.1 percent. Nikon Corp. finished up 4.6 percent.

The rise in resource prices lifted some commodities plays, including Australian mining giant BHP Billiton Ltd., up 4.4 percent.

After soaring overnight, oil prices slipped in Asian trade, with benchmark crude for April delivery off $1.04 at $44.34 a barrel. Prices jumped $3.73, or about 9 percent, on Wednesday to settle at $45.38.

In currencies, the dollar strengthened to 99.43 yen from 99.31 yen, while the euro weakened to $1.2582 from $1.2644.