Data boosts China stocks, other markets down

HONG KONG - Most world stock markets fell Friday after poor U.S. retail sales data but benchmarks in China gained after an economic report bolstered optimism about the world's No. 2 economy. Oil prices pushed higher as an insurgency spiraled in Iraq.

Chinese industrial production rose 8.8 percent in May, in line with analyst expectations, while retail sales grew faster and fixed asset investment expanded at a slower pace.

The latest numbers fueled hopes that recent mini-stimulus measures by authorities will prevent the economy from slowing too sharply.

"The overall May data confirmed moderate recovery in the economy in the second quarter," economists at JP Morgan wrote in a research report.

In early European trading, France's CAC 40 slipped 0.4 percent to 4,534.48 and Germany's DAX lost 0.6 percent to 9,881.71. Britain's FTSE 100 fell 0.5 percent to 6,808.84.

U.S. stocks were set for a tepid session. Dow and S&P 500 futures were little changed.

The Chinese figures came after official U.S. data showed consumer spending in the world's biggest economy increased less than expected in May while unemployment benefit applications rose.

In Iraq, Islamic militants vowed to march on Baghdad after pushing deep into parts of the country's Sunni heartland previously controlled by U.S. forces. U.S. officials ruled out putting troops back on the ground.

"For traders often jaded by seemingly constant news of potential geopolitical risks, the situation in Iraq looks a real concern," said Ric Spooner, chief market analyst at CMC Markets in Sydney. "Markets have been surprised by the speed and extent of rebel incursions into the south."

Japan's benchmark Nikkei 225 recouped earlier losses to close 0.8 percent higher at 15,097.84. South Korea's Kospi lost 1 percent to end at 1,990.85.

Hong Kong's Hang Seng climbed 0.6 percent to 23,319.17 and the Shanghai Composite Index in mainland China added 0.9 percent to 2,070.71. Australia's S&P/ASX lost 0.4 percent to 5,405.10.

U.S. benchmark oil for July delivery was up 51 cents to $107.04 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.13 to $106.53 on Thursday.

In currencies, the euro rose to $1.3572 from $1.3551 in late trading Thursday. The dollar rose to 101.91 yen from 101.88.

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