Portugal Colonial - European stock markets climb as bets build on rate cuts

Asia's leading indices closed lower after a tepid performance Tuesday on Wall Street, with focus on the release of the US central bank's favoured gauge of prices due Thursday.

The dollar, which has been under pressure over the prospect of rate cuts, firmed against main rivals Wednesday.

"Comments from a usually hawkish Fed policymaker that there could be room for cuts to interest rates... look set to push Wall Street higher at the open," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Oil prices extended gains before an output meeting of OPEC and its allies, notably Russia, on Thursday.

The Organisation for Economic Co-operation and Development trimmed its forecast for global growth this year to 2.9 percent.

The OECD, which warned on growth risks stemming from the Israel-Hamas conflict, added that it expects global output to slow next year to 2.7 percent.

Multiple interest rate hikes over the past two years aimed at cooling decades-high inflation have weighed heavily on the economy.

Markets are now eyeing cuts to borrowing costs amid less rampant price increases, with billionaire investor Bill Ackman, founder of Pershing Square Capital Management, believing there could a US rate-reduction as early as the first quarter of next year.

His comments came as Fed Governor Christopher Waller, usually one of the more hawkish members, struck an upbeat tone in a speech Tuesday.

"I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to two percent," he told the American Enterprise Institute in Washington, referring to the bank's target.

"I am encouraged by what we have learned in the past few weeks -- something appears to be giving, and it's the pace of the economy."

A string of indicators in recent weeks has suggested the US jobs market is softening and the economy slowing down -- but not quickly enough to cause much concern about a recession.

That has encouraged investors to shift back into risk assets, though the latest advance has been tempered by profit-taking ahead of what many hope will be a "Santa rally".

- Key figures around 1115 GMT -

London - FTSE 100: FLAT at 7,453.20 points

Paris - CAC 40: UP 0.5 percent at 7,285.02

Frankfurt - DAX: UP 0.9 percent at 16,135.56

EURO STOXX 50: UP 0.6 percent at 4,372.78

Tokyo - Nikkei 225: DOWN 0.3 percent at 33,321.22 (close)

Hong Kong - Hang Seng Index: DOWN 2.1 percent at 16,993.44 (close)

Shanghai - Composite: DOWN 0.6 percent at 3,021.69 (close)

New York - Dow: UP 0.2 percent at 35,416.98 (close)

Euro/dollar: DOWN at $1.0976 from $1.0994 on Tuesday

Pound/dollar: DOWN at $1.2684 from $1.2698

Dollar/yen: UP at 147.70 yen from 147.50 yen

Euro/pound: DOWN at 86.54 pence from 86.56 pence

West Texas Intermediate: UP 1.3 percent at $77.42 per barrel

Brent North Sea crude: UP 1.1 percent at $82.54 per barrel

P.Serra--PC