Portugal Colonial - Stocks slide on US rate-hike expectations

Wall Street opened lower while Frankfurt and Paris struggled in afternoon deals, but London was up. Hong Kong and mainland Chinese indices finished higher while Tokyo was flat.

A blockbuster US jobs report last week has undercut hopes that the Fed will put the brakes on its rate-hike campaign, which it launched last year in an effort to tame decades-high inflation

"A strengthening labour market theoretically makes it less likely that the Federal Reserve will halt interest rate rises anytime soon," said Russ Mould, investment director at AJ Bell.

"The Fed needs to see both the jobs market and inflation start to cool before it can justify changing its stance on rates."

Focus was on a speech due later Tuesday from Powell, who "remains a big wild card every time he speaks", said Chris Senyek at Wolfe Research.

"We still believe that the Fed will be 'higher for longer'," Senyek added.

January's rally for equities was halted as investors contemplate an extended period of high borrowing costs aimed at bringing down inflation from multi-decade highs.

While there are signs that price rises are slowing, and the Federal Reserve acknowledged progress in its battle last week, the employment data Friday was seen as a body blow for many.

The reading, which showed more than half a million new posts created in January, led to speculation the Fed could have to unveil even more rate hikes this year, while any chance of a cut before 2024 all but evaporated.

"As the market eagerly awaits Powell's speech, it's worth considering that his words hold the power to move mountains, or in this case, markets," said Matthew Weller, global head of research at Forex.com and City Index.

For his part, Biden is expected to highlight the strong job market and progress in mitigating inflation during his annual address to Congress.

- Bounce for Adani -

London's FTSE 100 was boosted Tuesday by bumper annual profits from British energy giant BP, whose shares rallied more than six percent

Sydney dropped Tuesday as the Australian central bank hiked interest rates to a 10-year high and warned of more to come as it struggles to get a hold on inflation.

Mumbai was also on the back foot, though shares in tycoon Gautam Adani's troubled empire soared following news it had moved to pay back loans of $1.1 billion after allegations of accounting fraud wiped more than $100 billion off the group's market value.

Adani Enterprises jumped as much as 25 percent before trading was suspended. They then pared some of those gains when they restarted.

Observers were also keeping tabs on geopolitical tensions after the United States shot down a suspected Chinese spy balloon that had been floating over the country for several days.

In other markets, oil prices extended gains after Iraqi Kurdistan suspended crude exports through Turkey as a precaution after a deadly earthquake rocked its northern neighbour and Syria.

- Key figures around 1455 GMT -

New York - Dow: DOWN 0.3 percent at 33,796.97 points

London - FTSE 100: UP 0.4 percent at 7,864.45

Frankfurt - DAX: DOWN 0.3 percent at 15,307.12

Paris - CAC 40: DOWN 0.2 at 7,123.09

EURO STOXX 50: FLAT at 4,204.24

Tokyo - Nikkei 225: FLAT at 27,685.47 (close)

Hong Kong - Hang Seng Index: UP 0.4 percent at 21,298.70 (close)

Shanghai - Composite: UP 0.3 percent at 3,248.09 (close)

Euro/dollar: DOWN at $1.0680 from $1.0728 on Monday

Pound/dollar: DOWN at $1.1978 from $1.2020

Euro/pound: DOWN at 89.20 pence from 89.22 pence

Dollar/yen: DOWN at 131.96 yen from 132.65 yen

Brent North Sea crude: UP 1.2 percent at $81.92 per barrel

West Texas Intermediate: UP 1.5 percent at $75.23 per barrel

A.Aguiar--PC