Asia Stocks Gain as Fed, China Slowdown Weighed Asian stock markets were mostly higher Tuesday as speculation that lukewarm U.S. economic indicators would keep the Federal Reserve from ending its stimulus program early offset pessimism about China's economy. Major European markets opened slightly down. Tokyo's Nikkei 225, the region's heavyweight index, jumped 1.8 percent to 14,098.74. Australia's S&P/ASX 200 was up 2.6 percent at 4,834.00 after the country's central bank left interest rates unchanged and said the Australian dollar is likely to continue falling, easing pressure on the economy. Singapore's Straits Times Index was up 0.9 percent to 3,170.10. Seoul's Kospi was almost unchanged at 1,855.02. In China, the Shanghai Composite Index reversed early losses to rise 0.6 percent to 2,006.56 after reports on Monday that Chinese manufacturing weakened in June amid a credit crunch. Hong Kong's Hang Seng fell 0.7 percent to 20,658.65. Much of the decline in Hong Kong was led by Chinese banks, which are facing central bank credit restrictions that have caused interest rates on loans by banks to other banks to sharply rise. "The market is still worrying that the liquidity crisis in Chinese banks is not over," said Francis Lun, chief economist of GE Oriental Financial Group. In Europe, the FTSE 100 in London was down 0.4 percent to 6,281.53 shortly after opening. Germany's DAX index dropped 0.9 percent to 7,913.40 while France's CAC-40 shed 0.7 percent to 3,741.77. All three indexes had risen the previous day. Futures augured gains on Wall Street. Dow futures rose 0.2 percent to 14,915 and broader S&P 500 futures added 0.3 percent to 1,611. Tuesday's gains in Asian markets followed a rally on Wall Street after an ISM manufacturing survey for the U.S. that showed a weak rebound in June thanks to new orders and higher production. The survey boosted stock markets as investors estimated it was strong enough to show the recovery is on track, but not so strong as to encourage the Federal Reserve to start ending its monetary stimulus program ahead of time. The Dow Jones industrial average gained 0.4 percent to 14,974.96 by day's end, while the broader S&P 500 index rose 0.5 percent to 1,614.96 and the Nasdaq composite rose 0.9 percent to 3,434. "This rebound in the ISM and moderate employment growth in June would leave the Fed on track to start tapering" its bond purchases in September, said Paul Dales, analyst at Capital Economics. U.S. economic indicators have been one of the main market drivers in recent weeks as investors gauge when the Fed is likely to wind down its stimulus. After a volatile few weeks, Fed officials are trying to calm investors' concerns about the central bank's planned reduction in monthly purchases of financial assets. Those purchases are aimed at stimulating the economy by pushing down market interest rates, and investors worry that as the economy improves, a pullback could deprive them of cheap borrowing rates. In that vein, the U.S. monthly jobs report due Friday will get huge attention as it is the most closely watched indicator for the world's largest economy. Benchmark oil for August delivery was up 5 cents to $98.05 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.43 to close at $97.99 a barrel on Monday. In currencies, the euro fell to $1.3026 from $1.3065 late Monday in New York. The dollar rose to 99.75 yen from 99.63 yen.