Global stocks drift despite European growth

BANGKOK Good news from two of Europe's biggest economies failed to shake global stock markets out of their lethargy Wednesday.

Germany's economy grew 0.7 percent in the April-June quarter compared with the previous three-month period. France posted better-than-expected quarterly growth following two quarters of contraction, and thus by definition, exited recession. The country's GDP rose 0.5 percent in the second quarter, soundly beating expectations of 0.1 percent.

Britain's FTSE 100 fell 0.4 percent to 6,584.58. Germany's DAX was marginally higher at 8,417.62. France's CAC-40 rose 0.1 percent to 4,096.94. Wall Street futures waned, with Dow Jones industrial futures heading 0.2 percent lower. S&P 500 futures fell 0.2 percent to 1,687.

The combined economy of the 17 countries that use the euro is expected to show growth for the second quarter at 0.2 percent, reversing a contraction in the first quarter.

"While this is certainly a welcome development, the growth is a mere pimple in terms of the type of growth needed to return the European economy to a sustainable growth path," said Michael Hewson of CMC Markets.

Outside of Europe's big economies are countries that remain bogged down by recession and high levels of debt and unemployment, he said.

Asian stock markets mostly drifted after U.S. retail sales data added to expectations the Federal Reserve will start scaling back its monetary stimulus this year.

The U.S. government said retail sales edged up in July by 0.2 percent, slightly less than expected. But core sales - a category that excludes autos, gas and building supplies - reached the highest level in seven months.

Retail sales are closely watched because consumer spending accounts for 70 percent of U.S. economic activity.

The figures could have an impact on expectations of when the Fed will start to reduce its monetary stimulus. Most economists think that so-called tapering will start as soon as next month.

Atlanta Fed President Dennis Lockhart said Tuesday that it was too early to say when the bank would ease back on its stimulus, but hinted that it would likely happen before the end of the year. The Fed's next policy meeting is Sept. 17-18.

Japan's Nikkei 225 index rose 1.3 percent to close at 14,050.16. South Korea's Kospi advanced 0.6 percent to 1,923.91. Australia's S&P/ASX 200 was nearly unchanged at 5,157.40.

Mainland Chinese shares fell. The Shanghai Composite Index lost 0.3 percent to 2,100.14, while the smaller Shenzhen Composite Index fell 0.2 percent to 1,012.80.

Hong Kong's stock exchange was closed for the day as Typhoon Utor lashed the Asian financial center with wind and rain.

Benchmark oil for September delivery was down 45 cents to $106.38 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 72 cents to close at $106.83 a barrel on the Nymex on Tuesday.

In currencies, the dollar rose to 98.26 yen from 98.23 yen late Tuesday. The euro rose slightly to $1.3265 from $1.3263.