LONDON (AP) — Markets were largely 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 endorsed private companies as "important components."
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 smaller and medium sized enterprises having a bigger role over big, politically favored state companies.
Mark Williams, chief Asia economist at Capital Economics, said his initial sense was that the meeting has fallen short of expectations, though conceded it would be "foolish" to make a snap judgment.
"Some disappointment was probably inevitable given the unrealistic belief in some quarters that it would deliver a detailed policy package," he said.
In Europe, the FTSE 100 index of leading British shares was flat by the close, at 6,726.79, while Germany's DAX fell 0.3 percent to 9,076.48. The CAC-40 in France fell 0.6 percent to 4,263.78.
A day after hitting an all-time closing high, the Dow Jones industrial average was down 0.3 percent at 15,732. The broader S&P 500 index, which is also just shy of its record high, fell 0.3 percent to 1,766.78.
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.
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 against the dollar, a move that could boost the competitive position of Japan's exporters. The dollar was up 0.6 percent at 99.71 yen.
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 trend, 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, the euro was up 0.2 percent at $1.3426 and the price of benchmark New York crude fell 87 cents to $94.26 a barrel.
Youkyung Lee in Seoul, South Korea and Joe McDonald in Beijing contributed to this report.