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Global stocks surge as investors welcome Fed assurance

MANILA, Philippines - Global stocks surged Wednesday as investors welcomed the latest signal from the U.S. Federal Reserve that it will move slowly to raise interest rates. Japan's Nikkei 225 bucked the trend and closed lower.

Britain's FTSE 100 rose 1.4 percent in early trading to 6,193.27. Germany's DAX climbed 1.4 percent to 10,024.07, while France's CAC 40 gained 1.4 percent to 4,429.74.

U.S. futures augured a positive opening on Wall Street, with both Dow and S&P 500 futures rising 0.6 percent.

Tokyo's Nikkei 225 lost 1.3 percent, closing at 16,878.96, on the continuing strong yen and the trade ministry's announcement of a 6.2 percent month-on-month drop in industrial production in February. Hong Kong's Hang Seng index climbed 2.2 percent to 20,803.39. China's Shanghai Composite surged 2.8 percent to 3,000.65, while South Korea's KOSPI rose 0.4 percent to 2,002.14. Australia's S&P ASX 200 was up 0.1 percent at 5,010.30. Southeast Asian markets also rose.

Softer growth prospects for China and a weak recovery in major industrial economies are expected to push down economic growth in developing Asia to 5.7 percent in 2016 and 2017, below previous projections, according to an Asian Development Bank report released Wednesday. The region's economy grew 5.9 percent in 2015. The Asian Development Outlook 2016 said China's economic growth is seen moderating to 6.5 percent this year from 6.9 percent last year and to 6.3 percent next year. Slower exports, a falling labor supply and supply-side reforms are reshaping the world's second-largest economy toward more domestic consumption and a further reduction in excess industrial capacity, it said.

"September is now the only date the markets are pricing with a better than 50 percent probability of a (U.S.) rate hike," said IG market analyst Angus Nicholson. "A weaker U.S. dollar not only benefits the dollar-denominated price of many commodities, which are a key export for most emerging markets, but it also lowers the burden of U.S. dollar-denominated debt in a range of emerging markets."

Benchmark U.S. crude gained 71 cents, rising to $39.00 a barrel in electronic trading on the New York Mercantile Exchange. The contract shed $1.11, or 2.8 percent, to $38.28 a barrel on Tuesday. Brent crude, used to price international oils, was up 60 cents at $40.45 a barrel in London.

The dollar declined to 112.23 yen from 112.77 yen. The euro rose to $1.1315 from $1.1287.

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