World stock markets post muted gains

BANGKOK (AP) - World stock markets mostly posted muted gains Monday as investors searched for fresh cues after a flat session on Wall Street and a pledge by world leaders to reduce budget deficits.

In a final statement from the top 20 industrial and developing nations at their weekend summit in Toronto, leaders endorsed a pledge by rich nations to slash budget deficits in half in three years. The deficit-cutting goal, however, was accompanied by concerns that cutting stimulus spending too quickly could stall the global economic recovery.

As trading started in Europe, Britain's FTSE 100 was up 0.4 percent, France's CAC-40 gained 0.2 percent and Germany's DAX was 0.4 percent higher. Futures pointed to slight gains on Wall Street with Dow futures up 9 points, or 0.1 percent, at 10.113.

In Asia, Hong Kong's Hang Seng index climbed 0.2 percent to 20,726.68 and benchmarks in South Korea, Taiwan, India, Indonesia and Singapore also posted mild gains.

Elswhere, Japan's Nikkei 225 stock average fell 34.63 points, or 0.3 percent to 9,693.94 as a strong yen weakened exporters. The market also awaited key economic data this week on industrial production, unemployment, and the Bank of Japan's "tankan" survey of business sentiment.

Australia's S&P/ASX 200 lost 0.7 percent to 4,384.50 and the Shanghai Composite index shed 0.7 percent to 2,535.28 on concern this week's huge IPO by state-owned Agricultural Bank of China Ltd. might depress prices.

Before the weekend, U.S. bank stocks shot higher after an agreement on a financial regulation bill reassured investors that new rules won't devastate the profits of finance companies.

The response in Asia was more muted, with mixed performance by banks across the region. National Australia Bank Ltd. shed 1.1 percent, and Japan's Mizuho Financial Group Inc. lost 2.6 percent. South Korea's Woori Finance Holdings Co. advanced 1.7 percent.

The Dow Jones industrials ended down 0.1 percent at 10,143.81 Friday in New York, while the broader Standard & Poor's 500 index and the Nasdaq composite index both gained 0.3 percent.

In currencies, the dollar gained to 89.42 yen from 89.33 late Friday. The euro fell to $1.2364 from $1.2371.

Benchmark crude for August delivery was down 27 cents at $78.58 a barrel in electronic trading on the New York Mercantile Exchange.