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China worries continue to weigh on markets

LONDON - Further disappointing Chinese economic figures kept market sentiment in check Thursday, after a volatile week that has been dominated by concerns over the world's number 2 economy.

Markets largely brushed aside the move by the Reserve Bank of New Zealand to raise its main interest rate by a quarter of a percentage point to 2.75 percent. Though other central banks have raised rates since the global financial crisis of 2008, such as increases in 2011 by the European Central Bank and Sweden's Riksbank, analysts said the move by the New Zealand central bank may represent a milestone in the global recovery.

Craig Erlam, market analyst at Alpari said the move marked "the beginning of a new chapter for the recovery in the global economy."

In Europe, the FTSE 100 index of leading British shares was flat at 6,620 while Germany's DAX rose 0.2 percent to 9,209. The CAC-40 in France was 0.2 percent higher, too, at 4,313.

The euro, meanwhile, was making ground and headed toward the $1.40 mark for the first time since 2011. It was trading 0.4 percent higher at $1.3967, its strongest level since October 2011.

Wall Street was poised for a steady opening, with both Dow futures and the broader S&P 500 futures 0.2 percent higher. How U.S. markets fare could hinge on retail sales figures for February due before the opening bell.

Most market attention, though, remains focused on China amid fears that its economy is beginning to struggle. Those fears accentuated Thursday after government figures showed industrial production rose by a lower than anticipated 8.6 percent in the first two months of this year. Retail sales growth also fell short of estimates.

Ongoing concerns about the situation in Ukraine have also kept a lid on sentiment this week, with a referendum due Sunday in Crimea about whether the region should join Russia.

"While U.S. markets appear to be finding a level of support quite near their all-time highs, European markets continue to show much less resilience, weighed down by concerns about a slowdown in China, as well as worries about where the current uncertain situation in Ukraine is going to lead," said Michael Hewson, chief market analyst at CMC Markets.

Earlier in Asia, trading was lackluster, with Japan's Nikkei 225 closing down 0.1 percent at 14,815.98 while Hong Kong's Hang Seng sank 0.7 percent to 21,756.08.

But in mainland China, the Shanghai Composite rose 1.1 percent to 2,015.03.

"With the Chinese central bank poised to cut the amount of cash banks must keep as reserves in an attempt to stimulate the economy, the local rally can perhaps be justified," said Patrick Latchford at Valutrades.

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