Stocks rise on Chinese stimulus hopes, ahead of Fed

HONG KONG (AP) - Chinese stocks led global markets higher on Monday on hopes of new stimulus in the world's second-largest economy. Investors were also looking ahead to a Federal Reserve meeting this week that may set the stage for the first U.S. interest rate hike since the global financial crisis.

KEEPING SCORE: In early European trading, Germany's DAX rose 1.1 percent to 12,036.12, the first time it has traded above the 12,000 level. France's CAC 40 was up 0.8 percent to 5,049.09, while Britain's FTSE 100 rose 0.5 percent to 6,775.73. U.S. stocks were poised to open higher, with Dow and S&P 500 futures both climbing 0.4 percent.

CHINA CHEER: Chinese stocks surged 2.3 percent to their highest level in about 5 ˆ½ years a day after Premier Li Keqiang was quoted by official news agency Xinhua as saying policymakers have "fairly ample room" and a "host of policy instruments" to boost economic growth if it slows more than expected. Speaking at the close of China's annual legislature on Sunday, Li said authorities have that leeway because they held off on bringing in sweeping stimulus measures since the major stimulus in response to the 2008 global financial crisis.

FED IN FOCUS: Investors elsewhere hunkered down ahead of the Fed's two-day meeting that begins Tuesday. A growing number of investors expect the U.S. central bank to raise its benchmark interest rate sooner rather than later and they will be watching to see whether officials signal through their language whether that's the case. Global stock markets have been lifted for several years by ultralow rates and other monetary stimulus but a Fed rate hike would mark the start of a return to more normal levels for borrowing costs.

THE QUOTE: The Fed meeting will "undoubtedly" be the week's highlight for investors, said Michael Every, head of Asia-Pacific financial market research at Rabobank, in a commentary. "We might well say goodbye to the key term 'patience', which has become a rolling rule of thumb for 'a few more months'. In other words, March could officially open the door to a potential June rate hike."

ASIA'S DAY: China's Shanghai Composite jumped 2.3 percent to 3,449.30, its highest since August 2009, on Li's comments. Japan's benchmark Nikkei 225 slipped less than 0.1 percent to close at 19,246.06 while South Korea's Kospi added 0.1 percent to 1,987.33. Hong Kong's Hang Seng rose 0.5 percent to 23,949.55. Australia's S&P/ASX 200 slipped 0.3 percent to 5,797.70. Markets in Southeast Asia were mixed.

ENERGY: Benchmark U.S. crude was down 60 cents to $44.24 a barrel in electronic trading on the New York Mercantile Exchange, after falling earlier to its lowest level in six years. The contract fell $2.21 to close at $44.84 a barrel on Friday.

CURRENCIES: The euro strengthened to $1.0534 from $1.0497 Friday. The dollar weakened to 121.31 yen from 121.40 yen.