LONDON (AP) — Stocks were down modestly but the euro was higher on Thursday after Germany's parliament overwhelmingly approved the strengthening of a bailout fund intended to help European countries mired in debt crises.

Though it was a clear victory for Chancellor Angela Merkel, as she did not have to rely on support from opposition parties, investors had expected the outcome and are aware that new plans and proposals will be needed to contain the debt crisis.

In the short-term, the markets' hope is that the vote in favour of a beefed-up rescue fund — the tally was 523 in favor, 85 against and 3 abstentions — indicates Germany is fully behind efforts to shore up Europe's defenses against a crisis that has already seen three countries bailed out and stoked talk Greece will default.

Germany is the biggest economy among the 17-countries that use the euro currency and has to contribute more than others to boosting the firepower of the bailout fund, the so-called European Financial Stability Facility, or EFSF. If passed, Germany will be guaranteeing loans in the future for up to €211 billion ($288 billion), rather than €123 billion so far.

"The overwhelming majority in the Bundestag is a good sign and will hopefully mark a step change in German commitment to bringing the spiraling crisis under control," said Sony Kapoor, managing director of Re-Define, an economic think-tank.

In Europe, Germany's DAX was down 0.5 percent at 5,552 while France's CAC-40 fell 0.2 percent to 2,999. The FTSE 100 index of leading British shares was underperforming, trading down 0.8 percent at 5,178 after weak U.K. bank lending figures worried investors about the potential impact on the economy from financial sector jitters.

Wall Street was poised for solid gains at the open — Dow futures were up 0.5 percent at 11,031 while the broader Standard & Poor's 500 futures rose by the same rate to 1,154.

Fears that Greece was heading rapidly toward a chaotic default have roiled global markets for weeks.

Earlier this week, financial stocks were buoyed by hopes that a plan was in the works to prevent Greece from defaulting on its debts — an event some fear would crush banks with significant holdings of the country's bonds and cause domino-style defaults in other indebted countries, such as Italy.

But late Wednesday, investor sentiment fell after German Chancellor Angela Merkel suggested that a second bailout package for Greece might have to be renegotiated. Several European leaders want banks to take bigger losses on Greek bonds. France and the European Central Bank oppose the idea.

The improved appetite for risk on Thursday also helped the euro brush off another survey showing that Europe's economy was grinding to a halt. When risk appetite is high, the euro usually garners support against the dollar. Following the German vote, it was trading 0.5 percent higher at $1.3611.

In its monthly survey of economic conditions around the 17 countries that use the euro, the EU's executive arm, the European Commission said confidence fell further in September following the previous month's precipitous collapse. Its economic sentiment indicator stands at 95, against August's 98.4, and is below the long-run average. The last time it was lower was in December 2009.

The further decline in confidence is likely to pile the pressure on the European Central Bank to reverse recent course and start cutting interest rates again, if not in October, then in November when Italy's Mario Draghi will have replaced the current head Jean-Claude Trichet.

Earlier in Asia, Japan's Nikkei 225 index swung between gains and losses before finishing up 1 percent to 8,701.23. South Korea's Kospi index shot up 2.7 percent to 1,769.29. China's Shanghai Composite Index dropped 1.1 percent to 2,365.34. Markets in Hong Kong were closed due to severe weather.

Oil prices tracked equities higher too — benchmark crude for November delivery rose 46 cents to $81.67 per barrel on the New York Mercantile Exchange.