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China stocks at 7-year high, other indexes brace for Fed

HONG KONG - Chinese stocks jumped to the highest level in seven years Wednesday as investors bet authorities will unleash new economic stimulus while other world indexes were uneven before the conclusion of a key Federal Reserve meeting.

European stocks were tepid in early trading, with France's CAC 40 down 0.2 percent to 5,019.86. Germany's DAX slipped 0.2 percent to 11,956.21. Britain's FTSE 100 added 0.3 percent to 6,854.70. U.S. markets were poised to open lower, with S&P 500 futures down 0.3 percent and Dow futures down 0.4 percent.

Chinese stocks are still riding high after Premier Li Keqiang said on the weekend that policymakers have enough room and tools to shore up economic growth if it falters. The latest sign of turbulence for the world's No. 2 economy came in the form of monthly housing data. Average private housing prices fell February in 69 out of 70 cities over the year ago period, according to the National Bureau of Statistics.

Investors are awaiting a Federal Reserve policy statement expected later Wednesday after the central bank wraps up a two-day meeting to discuss rates. Many economists expect it to change how it describes the time needed before it raises rates and signal that the first move will come in June, but others predict it will wait until later in the year.

"Given the influence of central bank policy within the current environment, and the U.S. position as top dog, this (Fed) event has the potential to set the tone across all markets globally," Will Leys, CMC Markets sales trader in Sydney, said in a commentary. "Ultimately, it all boils down to a matter of timing: When will the Fed commence the tightening cycle. The recent behavior of markets suggests that 'later' is the preference."

The Shanghai Composite Index in mainland China was the star performer, leaping 2.1 percent to end at 3,577.30, the highest close since May 2008. Japan's Nikkei 225 index edged up 0.6 percent to 19,544.48 and South Korea's Kospi slipped 0.1 percent to 2,028.45. Hong Kong's Hang Seng advanced 0.9 percent to 24,120.08 and Australia's S&P/ASX 200 ended unchanged at 5,842.30. Southeast Asian indexes were mostly lower.

Benchmark U.S. crude oil was at its lowest in more than six years, falling 84 cents to $42.62 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 42 cents to $43.46 a barrel on Tuesday. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 3 cents to $53.48 in London.

The dollar weakened to 121.22 yen from 121.34 in late trading Tuesday. The euro strengthened to $1.0611 from $1.0595.

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