Portugal Colonial - Global markets mixed ahead of US midterms

The dollar clawed back some of its recent losses versus the euro, while oil continued to be weighed down by weaker Chinese demand expectations.

Frankfurt stocks gained ground after overnight Wall Street gains, but Paris flatlined and London slid in value.

"Those US midterm elections today might keep investors on the sidelines a bit before they make any major decisions," noted Markets.com analyst Neil Wilson.

Hong Kong and Shanghai sank as speculation about a rollback of China's strict zero-Covid policies fuelled market volatility, even after Beijing vowed to stick with its harsh lockdowns and testing regimes.

On the upside, Tokyo stocks won 1.3 percent.

Polls opened Tuesday in crucial US elections that could decide the political future of both President Joe Biden and his predecessor Donald Trump -- who has all but announced he will seek the White House again in 2024.

Biden's Democrats are facing a gargantuan struggle to hang on to Congress, after a race the president has cast as a "defining" moment for US democracy -- while Trump's Republicans have campaigned hard on kitchen-table issues like inflation and crime.

Polls show Republicans are likely to win at least one house of Congress -- and some see the prospect of further Washington gridlock as a scenario that lessens the risk of policy uncertainty.

"Consensus is that investors prefer political deadlock as it prevents any significant shifts in policy," added Scope Markets analyst James Hughes.

"With that looking like a real possibility, the real market turbulence may appear later in the week."

- US on inflation watch -

On Monday, US stocks climbed, with the Dow Jones Industrial Average finishing up 1.3 percent and the broad-based S&P 500 rising 1.0 percent.

The next major data point that investors are watching is US inflation data due on Thursday.

SPI Asset Management analyst Stephen Innes said the data "will be the next marker for the (Federal Reserve) on how high to take interest rates".

Back in Asia, Hong Kong closed down 0.2 percent after jumping nearly three percent in the previous session as investors continued to hope for a relaxation of China's strict Covid-19 rules.

"Speculation about reopening continues to add some market volatility," said Taylor Nugent, an economist at National Australia Bank.

"In a timely reminder of the potential for Covid policy to hit output, Apple warned iPhone shipments will be lower than previously expected after China lockdowns affected operations at a supplier's factory," he noted.

- Key figures around 1130 GMT -

London - FTSE 100: DOWN 0.1 percent at 7,293.16 points

Paris - CAC 40: FLAT at 6,416.83

Frankfurt - DAX: UP 0.4 percent at 13,581.88

EURO STOXX 50: UP 0.3 percent at 3,722.09

Tokyo - Nikkei 225: UP 1.3 percent at 27,872.11 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 16,557.31 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,064.49 (close)

New York - Dow: UP 1.3 percent at 32,827.00 (close)

Pound/dollar: DOWN at $1.1468 from $1.1514 on Monday

Euro/dollar: DOWN at $1.0005 from $1.0020

Dollar/yen: DOWN at 146.26 from 146.93 yen

Euro/pound: UP at 87.23 pence from 87.03 pence

West Texas Intermediate: DOWN 1.2 percent at $90.70 per barrel

Brent North Sea crude: DOWN 0.7 percent at $97.25 per barrel

T.Resende--PC