LONDON (AP) — Markets were unmoved Tuesday by a promise from China's political leaders for the free market to play a bigger role in the country's state-dominated economy.
At the end of a four-day meeting aimed at producing a reform blueprint for the coming decade, Communist Party leaders said state ownership will remain a pillar of the economy. But they gave an unusually strong endorsement to Chinese private businesses, saying they also are "important components" of the economy.
China has become the world's number 2 economy through a growth model that's been based on exports and investment. However, reform advocates say further progress will require entrepreneurs having a bigger role over big, politically favored state companies.
Following the statement, which came out after the end of the Asian trading session, markets in Europe were roughly where they were before. The FTSE 100 index of leading British shares was down 0.3 percent at 6,707 while Germany's DAX fell the same rate to 9,081. The CAC-40 in France was 0.4 percent lower at 4,274.
Wall Street was poised for a soft opening, with both Dow futures and the broader S&P 500 down 0.1 percent. On Monday, the Dow closed at a record high while the S&P fell just short. Trading was light because of a public holiday and isn't expected to pick up much later amid a dearth of scheduled economic and corporate news.
Whether stock indexes, not just in the U.S., can push on further could rest on what the Federal Reserve does with regard to its monetary stimulus. For weeks, the prevailing view in markets has been that the Fed won't start reducing its $85 billion of monthly asset purchases until March. However, a run of recent economic data have raised expectations that the so-called "tapering" may begin as soon as next month.
In that context, much of the focus in financial markets will be on Janet Yellen's testimony to U.S. lawmakers this Thursday. Yellen has been tapped to replace Ben Bernanke as Fed chairman at the end of January, 2014.
"Yellen's confirmation hearing will be the main focus this week for an update on her thoughts and intentions," said Neil MacKinnon, global macro strategist at VTB Capital.
Earlier, Asian stock markets mostly closed higher ahead of the statement from the Chinese authorities. Tokyo's Nikkei jumped 2.2 percent to 14,588.68 as the yen suffered renewed weakness against the dollar, a move that could boost the competitive position of Japan's exporters. The dollar was up 0.6 percent at 99.70 yen.
Elsewhere, South Korea's Kospi rose 0.9 percent to 1,995.48 while China's Shanghai Composite gained 0.8 percent to 2,126.77. The PSE Composite in Manila gained 0.9 percent to 6,324.17 after dropping the day before. The Philippines is grappling with the aftermath of Typhoon Haiyan. Thousands are believed dead and shattered communications and transportation links are hampering recovery efforts.
Bucking the uptrend, Hong Kong's Hang Seng shed 0.2 percent to 22,899.38 and Australia's S&P/ASX 200 edged down 0.1 percent to 5,393.10.
Elsewhere, trading was fairly light too, with the euro down 0.1 percent at $13385 and the price of benchmark New York crude 27 cents lower at $894.87 a barrel.