The Japan Times - Stocks diverge amid economic and Mid East gloom

World oil prices rebounded somewhat, having tanked Monday on easing fears of a worsening regional Middle East conflict.

Europe wobbled in afternoon trading after morning gains as investors processed news about the eurozone economy that raised the prospect the ECB may not need to raise interest rates further.

Eurostat said the eurozone economy shrank by 0.1 percent in the third quarter after an anaemic 0.2-percent growth in the second quarter.

But consumer price inflation in the eurozone slowed to 2.9 percent, Eurostat data for October showed Tuesday, down from 4.3 percent in September and the lowest rate since July 2021 when it reached 2.2 percent.

Chief market analyst for XTB, Walid Koudmani, said the lack of growth and slowing inflation "alleviates the pressure on the European Central Bank to further raise interest rates".

The prospect of a peak in interest rates is positive for companies as it reduces their cost and boosts consumer purchasing power.

- 'Uncertainties linger' -

Attention is also on meetings by major central banks, with Japan announcing a small tweak to its policy control programme that fell short of expectations, sending the yen down against the dollar but providing support to Tokyo's equity market.

Analysts were also on tenterhooks on the eve of the Federal Reserve's latest interest rate call.

"The consensus in the market is that the Federal Reserve will maintain its current interest rate stance this week," noted SPI Asset Management analyst Stephen Innes.

"In a world marked by significant uncertainty, this has been the prevailing sentiment."

Oil had tumbled more than three percent Monday on relief that the Israel-Hamas conflict has not geographically escalated to include other regional powers such as Iran or Saudi Arabia, analysts said.

Israel's intensifying land and air campaign since Hamas's October 7 attacks has heightened fears for the 2.4 million civilians trapped inside Gaza, where the Hamas-ruled health ministry says more than 8,500 have been killed by Israeli bombardment.

Tel Aviv says more than 1,400 people, mainly civilians, were killed in Israel -- most of them on October 7 -- with at least 240 people taken hostage.

Asian markets were partly weighed down Tuesday by data showing China's factory sector activity shrank in October.

That stoked fresh worries about the health of the world's number-two economy.

"Market confidence in the Chinese economy remains depressed," said Nomura analysts.

"We expect economic conditions to remain poor or even to deteriorate further in coming months."

- Key figures around 1340 GMT -

New York - Dow: DOWN 0.3 percent at 32,830.24 points

London - FTSE 100: UP 0.2 percent at 7,338.02

Frankfurt - DAX: UP 0.5 percent at 14,790.64

Paris - CAC 40: UP 0.8 percent at 6,881.80

EURO STOXX 50: UP 0.7 percent at 4,057.30

Tokyo - Nikkei 225: UP 0.5 percent at 30,858.85 (close)

Hong Kong - Hang Seng Index: DOWN 1.7 percent at 17,112.48 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,018.77 (close)

Dollar/yen: UP at 150.97 yen from 149.06 yen on Monday

Euro/dollar: DOWN at $1.0606 from $1.0619

Pound/dollar: DOWN at $1.2145 from $1.2168

Euro/pound: UP at 87.34 pence from 87.23 pence

Brent North Sea crude: UP 0.1 percent at $86.43 per barrel

West Texas Intermediate: UP 0.1 percent at $82.34 per barrel

burs-giv/rl

H.Takahashi--JT