A look at economic developments around the globe

AP News
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Posted: Jul 13, 2011 1:12 PM
A look at economic developments around the globe

A look at economic developments and activity in major stock markets around the world Wednesday:

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LONDON _ Hopes that the Federal Reserve could provide new economic stimulus gave stocks a boost, a day after markets were shaken by fears Europe's debt crisis was spreading to large economies like Italy.

The recovery was strongest in Milan, where the main index rallied to close 1.8 percent higher and Italy's bond yields edged down further. Britain's FTSE 100 rose 0.6 percent, Germany's DAX gained 1.3 percent and France's CAC closed up 0.5 percent.

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BEIJING _ China's rapid economic growth slowed in the latest quarter to a still robust 9.5 percent, easing fears of an abrupt slowdown and giving Beijing room to tighten controls to fight surging inflation.

The Chinese report helped support Asian stocks. Hong Kong's Hang Seng index added 1.2 percent, the Shanghai Composite index rose 0.5 percent, South Korea's Kospi gained 0.9 percent and Australia's S&P/ASX 200 rose 0.4 percent.

Japan's Nikkei 225 stock average finished up 0.4 percent after the yen pulled back from its highest level against the U.S. dollar since mid-March.

After the dollar fell under the 79-yen level, Japanese Finance Minister Yoshihiko Noda described the move as "slightly one-sided." His comment triggered speculation that Japan might intervene in currency markets.

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MILAN _ Italy will strengthen its package of austerity measures and fast-track its approval by parliament, Finance Minister Giulio Tremonti pledged. He sought to calm market fears that the eurozone's third-largest economy would be swept into the European debt crisis.

Italy's move to intensify its austerity drive received a boost from Fitch Ratings agency, which said the measures will help stabilize the government's finances and its credit rating. Fitch is the last ratings agency to weigh in on Italy's finances, after Moody's and Standard & Poor's both warned of possible downgrades.

Italian lawmakers were working to bolster the euro48 billion ($67 billion) in austerity measures that begin to take effect this year and aim to balance the budget by 2014. The Senate is set to vote on Thursday before passing off to the lower house on Friday in votes that will measure confidence in Premier Silvio Berlusconi's government.

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LONDON _ Unemployment in Britain was steady at 7.7 percent in the three months ending in May, but jobless claims rose by the most in two years.

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MADRID _ Spain's prime minister said data due for release in a few weeks will show the economy grew in the second quarter, in an apparent bid to calm markets nervous about the debt crisis.

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WASHINGTON _ The International Monetary Fund said Greece's government must move quickly and decisively to bring its huge public debt under control.

The lending organization praised Greek officials for adopting plans to cut its budget deficits to less than 3 percent of GDP by 2014. Still, Greece has little room for error as it implements the plans.

The IMF's report also expressed support for voluntary steps by banks and other private sector holders of Greek debt to reduce its debt burden. Those steps could include accepting longer repayment periods, though credit rating agencies have said such steps would constitute default.