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Asia stocks up, Europe subdued ahead of U.S. data

SEOUL, South Korea - Asian stocks extended gains Tuesday ahead of U.S. and Chinese economic reports later this week while European markets were subdued amid the possibility of new sanctions against Russia. The South Korean stock market closed at a three-year high.

In morning trade in Europe, France's CAC 40 dipped 0.2 percent to 4,335.53 and Germany's DAX shed 0.1 percent to 9,586.48. Britain's FTSE 100 edged up 0.1 percent to 6,792.33. Futures showed Wall Street was set for a weak start after its main benchmarks closed flat on Monday. Dow Jones and S&P 500 futures both fell 0.2 percent.

Tensions between Russia and the West may resurface as the West is expected to slap another round of sanctions against Russia. On Monday, the White House said the United States and European Union plan to impose new sanctions against Russia this week, including penalties targeting key parts of the Russian economy. The EU had previously refrained from stepping up sanctions in the wake of the shooting down of a Malaysian jetliner over a rebel-controlled region of Ukraine, killing 298 people.

Japan's Nikkei 225 added 0.6 percent to 15,618.07. South Korea's Kospi posted its highest close since August 2011, rising 0.6 percent to 2,061.97. South Korean stocks have been boosted by the new finance minister's recent announcement of economic stimulus and measures to boost the housing market. Hong Kong's Hang Seng finished 0.9 percent higher at 24,640.53 and China's Shanghai Composite gained 0.2 percent to 2,183.19.

Companies are in the middle of corporate earnings season. Japanese carmaker Honda Motor Co. said its April-June quarter profit surged nearly 20 percent, meeting expectations. The maker of the Accord and Civic raised its full-year profit and sales forecasts. Shares of Honda closed 0.8 percent lower before its earnings release. On Thursday, Asian tech heavyweights Samsung Electronics Co. and Sony Corp. will release their quarterly financial results.

William Leys, sales trader at CMC Markets, said markets were calm before the data storm, forecasting that trading volume would become heavier toward the end of this week. "Caution is the pre-eminent theme across global markets at the moment, as investors anticipate a spate of key economic data due later in the week, amid a backdrop of persistent geopolitical concerns," Leys said in a commentary. "With a variety of weighty announcements looming, the stage is set for an action packed end to the week."

On Wednesday, the U.S. will release gross domestic product figures for the April-June quarter. The world's largest economy is expected to pick up after severe winter cold dampened growth the previous quarter. The Federal Reserve is scheduled to issue a statement after wrapping up a two-day policy meeting on Wednesday. On Thursday, a report on China's manufacturing industry will give investors an update on the health of the world's factory floor. On Friday, the U.S. will release its monthly jobs data. Analysts estimate that the U.S. labor market added between 235,000 and 255,000 jobs in July.

The euro was almost flat at $1.3438 from the previous session's $1.3439. The dollar drifted higher to 101.91 yen from 101.84 yen. The price of oil dipped slightly, with benchmark U.S. crude for September delivery down 7 cents to $101.60 a barrel.