​World stocks drift as Fed-fueled rally fades

HONG KONG - World stock markets drifted Friday, as enthusiasm faded over the Federal Reserve's hint that interest rate increases will be gradual.

European markets were slightly higher in early trading. France's CAC 40 was up 0.1 percent to 4,918.88 and Germany's DAX climbed 0.2 percent to 11,113.05. Britain's FTSE 100 rose 0.1 percent to 6,335.05.

U.S. stocks were poised to open higher: Dow futures added 0.4 percent, and broader S&P 500 futures rose 0.3 percent.

The euphoria in financial markets over the Federal Reserve's minutes that were released Wednesday is fading. The report showed that Fed officials agreed that a rate hike is firmly on the cards for next month and that the pace of rate increases after that will be gradual. The news gave a strong boost to stock markets around the world by easing uncertainty in the minds of investors who have been fixated on when the Fed would raise its policy rate. It has been at a record low since the 2008 global financial crisis.

"Equities globally have responded positively to this macro picture as it still collectively shows that central bank policy can and will alter markets and economies," said Evan Lucas, market strategist at IG. "However, what would be a dire market-mover would be if the Fed breaks its December mantra and holds off," Lucas wrote in a commentary. Such a move would result in a big sell-off as investors lose confidence in its statements, he said.

Japan's Nikkei 225 edged up 0.1 percent to 19,879.81. South Korea's Kospi was up less than 0.1 percent at 1,989.86. Hong Kong's Hang Seng was up 1.1 percent to 22,754.72. The Shanghai Composite Index in China rose 0.4 percent to 3,630.50. Australia's S&P/ASX 200 rose 0.3 percent to 5,256.10.

Benchmark U.S. crude rose 3 cents to $41.77 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 23 cents to settle at $41.72 a barrel in New York on Thursday. Brent crude, used to price international oils, lost 8 cents to $44.10 a barrel in London.

The dollar rose to 122.91 yen from 122.89 yen on Thursday. The euro slipped to $1.0670 from $1.0723.