Portugal Colonial - Stocks mixed on hopes of rate pause despite oil surge

Oil prices rose further after soaring on Monday following a surprise decision by the OPEC+ producers' group to cut output in order to keep prices high.

While higher energy costs could further stoke inflation that has pummelled businesses and households worldwide, signs of economic headwinds might convince central banks to hold back on further rate hikes.

Easing fears about solvency risks in the banking sector after recent US bank failures and the emergency rescue of Credit Suisse were also supporting equities.

"The time for pause and consideration may have arrived," said Craig Erlam, senior market analyst at brokerage firm OANDA. "We may see most now proceed with caution and only tighten if absolutely necessary."

After opening with slight gains, US indices slipped across the board in opening deals, handing back part of the gains chalked up on the S&P 500 and Dow on Monday.

A closely watched gauge of US factory activity from the Institute for Supply Management (ISM) missed forecasts and showed a fifth consecutive month of contraction on Monday.

That raised hopes of a Fed pause in rate hikes, and eyes are now on US jobs data due Friday, which will provide the latest snapshot of the economy and potentially indicate if further monetary tightening is likely.

In Europe, stock markets broadly advanced, with the Paris CAC 40 index flirting with all-time highs.

London stocks nudged higher and the pound hit a 10-month high against the dollar on recent strong UK data, bolstering expectations that the Bank of England would nonetheless continue to raise interest rates to cool sky-high inflation.

- Key figures around 1350 GMT -

London - FTSE 100: DOWN 0.1 percent at 7,668.37 points

Paris - CAC 40: UP 0.4 percent at 7,375.04

Frankfurt - DAX: UP 0.6 percent at 15,679.76

EURO STOXX 50: UP 0.5 percent at 4,334.38

Tokyo - Nikkei 225: UP 0.4 percent at 28,287.42 (close)

Hong Kong - Hang Seng Index: DOWN 0.7 percent at 20,274.59 (close)

Shanghai - Composite: UP 0.5 percent at 3,312.56 (close)

New York - Dow: DOWN 0.1 percent at 33,561.03

Euro/dollar: DOWN at $1.0908 from $1.0899 on Monday

Pound/dollar: UP at $1.2486 from $1.2414

Euro/pound: DOWN at 87.36 pence at 87.80 pence

Dollar/yen: UP at 132.56 yen from 132.46 yen

Brent North Sea crude: UP 0.8 percent at $85.57 per barrel

West Texas Intermediate: UP 1.0 percent at $81.24

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A.Magalhes--PC