LONDON: European equities mostly firmed Wednesday but London fell on the strong pound, as spiking UK inflation sparked talk of a pre-Christmas interest rate hike from the Bank of England.
The Frankfurt and Paris stock markets nudged higher in early afternoon eurozone trading, aided by the weaker euro as dealers braced for tighter monetary policy in Britain and the United States while the ECB sits tight.
London's FTSE 100 index fell however, as data showed UK annual inflation spiked to a near decade-high in October on higher energy bills.
The news sent the pound jumping as traders priced in a December interest rate hike from the Bank of England, emboldened also by Tuesday's upbeat UK jobless data.
"It is a mixed picture for European markets with the FTSE 100 under pressure... following a spike in the pound against the euro on the back of hot UK inflation figures," said Interactive Investor analyst Victoria Scholar.
"Travel and leisure is at the bottom... amid concerns about rising Covid cases while banks and basic resources are outperforming."
Inflation continues to fuel expectations that global central banks will be forced to tighten monetary policy quicker than expected.
New York's three main indices rose again Tuesday after data showed a forecast-busting rise in retail sales as well as solid earnings from shopping giants Walmart and Home Depot.
The news reinforced optimism about the recovery in the world's top economy and showed consumers were brushing off the effects of surging inflation, for now.
However, it also provided more support to calls for the Federal Reserve to act sooner to prevent overheating and make sure prices do not run out of control.
Top Fed official James Bullard said the bank should take a "more hawkish" shift and that the tapering of its vast bond-buying programme -- which has helped support an extended global equity rally -- "could move faster".
In Asia, Hong Kong retreated for the first time after a six-day run-up, while Tokyo, Sydney, Seoul, Singapore, Mumbai, Manila and Wellington also fell.
However, Shanghai and Taipei reversed early losses while there were mild gains in Bangkok and Jakarta.
Asian markets down as US data strengthen call for Fed action
Oil prices sank as traders digested rising US crude reserves, indicating weaker demand in the world's top crude consumer.
Key figures around 1200 GMT
London - FTSE 100: DOWN 0.2 percent at 7,310.58 points
Frankfurt - DAX: UP 0.1 percent at 16,269.01
Paris - CAC 40: UP 0.1 percent at 7,161.49
EURO STOXX 50: UP 0.1 percent at 4,404.98
Tokyo - Nikkei 225: DOWN 0.4 percent at 29,688.33 (close)
Hong Kong - Hang Seng Index: DOWN 0.3 percent at 25,650.08 (close)
Shanghai - Composite: UP 0.4 percent at 3,537.37 (close)
New York - Dow: UP 0.2 percent to 36,142.22 (close)
Euro/dollar: UP at $1.1334 from $1.1320 at 2200 GMT
Pound/dollar: UP at $1.3469 from $1.3430
Euro/pound: DOWN at 84.12 pence from 84.29 pence
Dollar/yen: DOWN at 114.63 yen from 114.82 yen
Brent North Sea crude: DOWN 0.4 percent at $82.07 per barrel
West Texas Intermediate: DOWN 0.6 percent at $80.31 per barrel
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