LONDON - World stock markets remained subdued Thursday as relief over China's economic growth was offset by renewed fears about the state of the U.S. economy ahead of key earnings releases from leading American banks.

While China said its annual growth slowed to 6.1 percent in the first quarter from 6.8 percent in the previous quarter, there had been some fears that the downturn would have been more severe.

Though the world's third largest economy continues to be a key driver for the global economy, some recent optimism surrounding the largest economy, the U.S., appears to have dissipated amid some downbeat economic news. Recent figures have shown that U.S. retail sales and industrial production remain under pressure.

"The hope of a relatively speedy recovery from the global recession is now fading into the background as weak U.S. economic data reignites fears over the speed of any pick up despite the massive stimulus measures," said Stuart Bennett, an analyst at Calyon Credit Agricole.

By late-morning London time, the FTSE 100 index of leading British shares was up 23.57 points, or 0.6 percent, at 3,991.97 while France's CAC-40 rose 12.62 points, or 0.4 percent, at 2,998.36. Germany's DAX was up 10.53 points, or 0.2 percent, at 4,560.32.

Hopes that an improvement in the global economy may emerge soon had enticed some investors back into stock markets in recent weeks. The rise in risk appetite has gained momentum over the last month or so as global equities have rallied from multiyear lows to post their biggest gains in such a short space of time since 1933.

That improved sentiment appears to have dried up this week following the Easter holiday. Stock markets usually start rallying around 6-9 months before real evidence of an economic recovery emerges, analysts say.

In Asia earlier, most markets gyrated throughout the day after initially trading higher on Wall Street's strong finish following a moderately encouraging economic assessment from the U.S. Federal Reserve.

In Japan, the Nikkei 225 stock average was up almost 3 percent before turning down and rising again to close up 12.30 points, or 0.1 percent, at 8,755.26. In Hong Kong, the Hang Seng finished down 86.63 points, or 0.6 percent, at 15,582.99.

In mainland China, the Shanghai index edged down 1.92, or 0.1 percent, to 2, 534.13. Elsewhere, South Korea's Kospi added 0.3 percent and Australia's main index rose 0.7 percent. Benchmarks in India and Singapore fell.

The main focus of attention in the markets Thursday will be in the U.S., where banking giant JP Morgan Chase & Co. unveils first quarter earnings. Earlier this week, Goldman Sachs Group Inc. kicked off the U.S. banking reporting season with a better-than-expected profit of $1.66 billion for the first quarter and said it was looking to raise $5 billion via a rights issue to help pay back the $10 billion it took from the U.S. government last autumn in the Troubled Asset Relief Program (TARP).

Goldman Sachs appears to have set the bar high for the other big U.S. banks due to report earnings in the coming couple of weeks, including JP Morgan, which was also a recipient of some $25 billion of TARP funds.

"Earnings news from JP Morgan stands to keep the banking sector in focus too and could well produce further volatility," said Matt Buckland, a dealer at CMC Markets.

Futures markets were indicating that Wall Street would open lower later. Dow futures were down 34 points, or 0.4 percent, at 7,946 while the broader Standard & Poor's 500 futures fell 4.8 points, or 0.6 percent, to 843.70.

Oil prices continued to hover around the $50 a barrel mark, with benchmark crude for May delivery up 52 cents at $49.77 in electronic trading on the New York Mercantile Exchange. The contract on Wednesday dropped 16 cents to settle at $49.25.

In currencies, the yen slipped to 98.73 from 99.35. The euro was steady at $1.3155.

AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.

A service of the Associated Press(AP)