Portugal Colonial - Stocks mixed before fresh rate hikes

Wall Street traded higher while European indices were sluggish in afternoon deals after Asian markets finished in the red.

London closed marginally down while Paris and Frankfurt settled flat at the end of the day's trading.

Investors absorbed data showing that the eurozone economy grew by a slender 0.1 percent in the fourth quarter, confounding expectations of a contraction.

"The surprise growth... makes a technical recession across the eurozone an increasingly unlikely prospect," said CEBR economist Karl Thompson.

The International Monetary Fund forecast that Germany and Italy would avoid recessions in 2023, though official data showed both economies shrank in the last three months of 2022.

France avoided a contraction in the fourth quarter, but French President Emmanuel Macron faced nationwide strikes and protests on Tuesday over his plan to reform pensions.

London stocks took a knock after the IMF said the UK economy would contract 0.6 percent this year as inflation remains stubbornly high.

That would make Britain the worst performer among the world's advanced economies, and compared with prior guidance for 0.3-percent growth.

"We're seeing plenty of caution in the markets this week which is perhaps not entirely surprising given what lies ahead," said Craig Earlam, senior market analyst at OANDA.

"It was always going to be a challenging period given the level of economic uncertainty, not to mention the staggering number of layoffs we're seeing, in the tech space in particular," he added.

- Asia in the red -

It was another busy day for company results, with oil major ExxonMobil posting record profits of $55.7 billion in 2022, Swiss bank UBS reporting better-than-expected quarterly earnings and music streaming service Spotify seeing a more-than-forecast increase in subscribers.

Construction equipment manufacturer Caterpillar released mixed fourth quarter results, highlighting that rising transport and material costs weighed on margins.

Elsewhere Tuesday, Asian equities fell despite data showing a bounce in Chinese economic activity.

Traders shrugged off data showing China's factory activity expanded in January after four months of contraction as the economy reopened from strict Covid curbs.

Investors looked ahead to Wednesday when the Federal Reserve is due to announce another rise in US borrowing costs to tackle inflation.

Analysts expected a 25 basis-point lift, which would be less aggressive than December's half-point lift.

Investors are already speculating that slowing US inflation could allow for a possible rate cut towards the year's end, even though several policy board members have consistently pushed back against such a move, insisting they will not let up until prices are under control.

As the Fed seeks to cool the economy, a closely-watched survey on Tuesday showed that US consumer confidence fell in January.

Traders will closely listen to any signals from Fed chairman Jerome Powell about future rate decisions.

"Powell is expected to strike a hawkish tone which is in contrast to market expectations over the Fed cutting rates near the end of 2023," said Lukman Otunuga, market analyst at online trading platform FXTM.

The Bank of England and the European Central Bank will both unveil their latest rate calls on Thursday.

- Key figures around 1640 GMT -

New York - Dow: UP 0.2 percent at 33,796.14 points

EURO STOXX 50: UP 0.1 percent at 4,163.45

London - FTSE 100: DOWN 0.2 percent at 7,771.70 (close)

Frankfurt - DAX: FLAT at 15,128.27 (close)

Paris - CAC 40: FLAT at 7,082.42 (close)

Tokyo - Nikkei 225: DOWN 0.4 percent at 27,327.11 (close)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 21,842.33 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,255.67 (close)

Euro/dollar: UP at $1.0864 from $1.0851 on Monday

Pound/dollar: DOWN at $1.2319 from $1.2352

Euro/pound: UP at 88.17 pence from 87.85 pence

Dollar/yen: DOWN at 130.15 yen from 130.39 yen

West Texas Intermediate: UP 0.9 percent at $78.69 per barrel

Brent North Sea crude: UP 0.7 percent at $85.09 per barrel

P.Cavaco--PC