Relief over Chinese trade figures shores up markets despite another fall in Japan's Nikkei

LONDON - Solid Chinese trade data underpinned most global stock markets Thursday, though Japanese shares underperformed for the second day running as the yen rallied again.

China's exports and imports both increased in July, beating expectations and easing concerns over the slowdown in the world's second-largest economy. Exports were up 5.1 per cent from a year earlier, while imports jumped 10.9 per cent.

"The report has boosted investor optimism that the Chinese economy may be at least stabilizing in the near-term," said Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ.

In Europe, the FTSE 100 index of leading British shares was up 0.4 per cent at 6,534 while Germany's DAX rose the same rate to 8,296. The CAC-40 in France was 0.5 per cent higher at 4,057.

Wall Street was poised for modest gains with both Dow futures and the broader S

There's very little economic news later, aside from weekly jobless claims. And with the corporate and economic news drying up over the coming weeks, there's a sense that markets may drift.

"The relative absence of fundamentals between now and the weekend break combined with the fact the summer holiday season is very much in full swing could leave markets struggling to find much fresh momentum," said Mike McCudden, head of derivatives at Interactive Investor.

The number one focus in markets is on the U.S. Federal Reserve and when it might rein in its monetary stimulus program. Anything that impacts up on those expectations could well affect markets. Over the past few years, the Fed has helped keep interest rates super-low in order to spur growth. Much of the money has found its way into financial markets. Stocks have been a beneficiary as investors seek out returns that outpace bonds.

The dollar's near-term fortunes will likely hinge on expectations on when the Fed will start reducing its stimulus. The euro was 0.1 per cent firmer at $1.3350.

Earlier in Asia, Japan's Nikkei 225 index struggled again, falling 1.6 per cent to 13,605.56 after the Bank of Japan ended a two-day policy meeting without boosting its monetary stimulus. That shored up the yen, which has fallen this year because of the stimulus program. The dollar was down 0.3 per cent at 96.31 yen.

"The lack of additional easing from the BoJ is what's responsible for a lot of the yen strength recently, with the markets clearly having withdrawal symptoms," said Craig Erlam, market analyst at Alpari.

Elsewhere in Asia, South Korea's Kospi advanced 0.3 per cent to 1,883.97 while mainland China's Shanghai Composite Index slipped 0.1 per cent to 2,044.90.

The oil price was steady, with the benchmark New York rate up 10 cents at $104.47 a barrel.