World stocks mostly higher, Japan shrugs off GDP drop

MUMBAI, India - Global stock markets overcame a contraction in Japan's economy and jitters about Ukraine and Iraq to mostly rise Wednesday, but analysts said new geopolitical developments would likely make for volatile trading.

Germany's DAX added 0.8 percent to 9,142.83 and France's CAC 40 rose 0.6 percent to 4,187.69. Britain's FTSE 100 was steady at 6,631.61. Futures pointed to a move higher on Wall Street. Dow Jones futures rose 0.3 percent to 16,568 and S&P 500 futures gained 0.4 percent to 1,937.70.

Japan's Nikkei 225 closed up 0.4 percent at 15,213.63. Hong Kong's Hang Seng rose 0.8 percent to 24,890.34. China's Shanghai Composite edged up 0.1 percent to 2,222.88 while Australia's S&P/ASX 200 fell 0.3 percent to 5,514.70. Seoul's Kospi added 1 percent to 2,062.36.

Government figures showed Japan's economy, the world's third largest, shrank at an annualized pace of 6.8 percent in the second quarter after spending got slammed by a sales tax hike that kicked in from April. The contraction was expected and economists think spending will pick up again in coming months.

Russian President Vladimir Putin on Wednesday was set to travel to Crimea, the Black Sea peninsula Russia annexed in March. The visit comes a day after a convoy of more than 260 Russian trucks, reportedly packed with supplies, moved toward Russia's border with Ukraine. Kiev said the goods would only be allowed to cross if they were inspected by the International Red Cross. Ukraine is fearful that Russia could use the move as a cover for sending troops into separatist-held territory. Investors are also watching political machinations in oil-rich Iraq.

"It certainly seems to be a headline geopolitical risk driven market at the moment, as any news out of Russia, Ukraine or Iraq dictates sentiment," said IG market strategist Stan Shamu.

Britain is scheduled to release employment and inflation numbers Wednesday as traders look for further signs of strengthening in employment and wage growth. Later, the U.S. is set to release retail sales data.

U.S. crude oil futures were up 4 cents at $97.41 a barrel in electronic trading on the New York Mercantile Exchange. That followed three days of increases over concerns about the reliability of Iraqi oil production. U.S. crude is trading at a seven-month low.

The euro slipped to $1.3353 from $1.3370 late Tuesday. The dollar rose to 102.49 yen from 102.29 yen.