Global shares mixed as German politics cloud sentiment

TOKYO (AP) - European share benchmarks drifted lower in early trading Tuesday as Germany's president prepared to meet with party leaders hoping to broker a new government. The weakness in Europe followed an upbeat day in Asia, where Hong Kong's Hang Seng index had its biggest gain in nearly two months.

KEEPING SCORE: France's CAC 40 slipped 0.1 percent to 5,335.32 in early trading, while Germany's DAX was down 0.1 percent at 13,044.78. Britain's FTSE 100 lost 0.1 percent to 7,380.53. U.S. shares were set to drift lower with Dow futures down less than 0.1 percent at 23,386. S&P 500 futures lost 0.1 percent to 2,580.40.

GERMANY: German President Frank-Walter Steinmeier was to meet with party leaders after talks to form a new government between Chancellor Angela Merkel's conservative bloc the left-leaning Greens and pro-business Free Democrats broke down earlier this week. Barring a compromise, a minority government or new elections are the only options.

NORTH KOREA: Nervousness about North Korea did little to cloud investor sentiment in Asia, instead lifting defense-related stocks in Japan. President Donald Trump put North Korea on America's terrorism blacklist, despite questions about Pyongyang's support for international attacks beyond the assassination of its leader's half brother in February. IHI Corp. surged 1.5 percent, while Mitsubishi Heavy Industries edged up 0.5 percent.

ANALYST VIEWPOINT: The standoff in Germany is "undoubtedly a blow for Merkel but highlights the vast difference of interparty opinions surrounding migration and energy policies," Stephen Innes of OANDA said in a commentary. "Keep in mind; liquidity is exceptionally thin and could exaggerate moves. But this knee-jerk reaction does look a bit overdone as Merkel can still establish a minority government with either the FDP or Green Party," he said.

ASIA'S DAY: Japan's benchmark Nikkei 225 rose 0.7 percent to finish at 22,416.48, while the Kospi in South Korea added 0.1 percent to 2,530.70. Hong Kong's Hang Seng rose 1.9 percent to 29,818.07. Australia's S&P/ASX 200 climbed 0.3 percent to 5,963.50 and the Shanghai Composite index gained 0.5 percent to 3,410.50. India's Sensex added 0.6 percent to 33,547.34. Southeast Asian shares were mixed.

ENERGY: Benchmark U.S. crude oil gained 10 cents to $56.52 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the international standard, climbed 28 cents to $62.50 per barrel.

CURRENCIES: The dollar slipped to 112.51 yen from 112.62 late Monday. The euro was little changed, inching down to $1.1732 from $1.1733.

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