Portugal Colonial - Stock markets diverge before US inflation data

London stocks edged lower as official data showed UK wages rose faster than inflation, reigniting concerns that British interest rates could remain at multi-year highs for longer than thought, or even increase further.

Official data, however, is expected to reveal on Wednesday a sharp fall in British annual inflation.

In the eurozone, Frankfurt and Paris gained approaching the half-way stage, after a similarly mixed showing in Asia.

Wall Street's three main bourses provided a tepid lead as traders bided their time before the closely watched consumer price index (CPI) report, as well as other key figures including retail sales and jobless claims.

Oil prices won further support from an upbeat market outlook from the OPEC cartel of crude producers, while the dollar wavered.

- 'On edge of seats' -

"Investors are on the edge of their seats, waiting for the latest scoop on US inflation data to take a fresh direction in both stock and bond markets," added SwissQuote analyst Ipek Ozkardeskaya.

CPI is forecast to have hit 3.3 percent in October, down from 3.7 percent in September, according to a Bloomberg survey of economists.

But that is still well above the Fed's two percent target.

A number of Fed decision-makers are also lined up to make speeches, which will be pored over for their views on the central bank's best course of action as they try to bring prices under control without tipping the economy into recession.

There is a general consensus that they have already hit their peak in terms of rates, having brought inflation down from more than nine percent last year, though officials have left the door open to another hike.

"Investors are fully aware that fluctuations in inflation, especially top-side beats, are an ongoing risk to markets," said analyst Stephen Innes at SPI Asset Management.

"It is too early to completely dismiss the possibility of a hike in December (or January)."

Other analysts pointed out that policymakers have reasserted their determination to bring inflation to heel and would keep borrowing costs elevated for some time, even if they do not lift again.

Meanwhile, there are hopes that this week's upcoming meeting between US President Joe Biden and Chinese leader Xi Jinping could ease tensions between the economic superpowers and give a much-needed boost to markets.

Wall Street will later digest earnings from retail titans Walmart and Target for clues on consumer activity.

- Key figures around 1115 GMT -

London - FTSE 100: DOWN 0.3 percent at 7,404.89 points

Paris - CAC 40: UP 0.2 percent at 7,098.61

Frankfurt - DAX: UP 0.5 percent at 15,413.53

EURO STOXX 50: UP 0.3 percent at 4,243.12

Tokyo - Nikkei 225: UP 0.3 percent at 32,695.93 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 17,396.86 (close)

Shanghai - Composite: UP 0.3 percent at 3,056.07 (close)

New York - Dow: UP 0.2 percent at 34,337.87 (close)

Euro/dollar: UP at $1.0722 from $1.0701 on Monday

Dollar/yen: FLAT at 151.71 yen

Pound/dollar: UP at $1.2287 from $1.2280

Euro/pound: UP at 87.23 pence from 87.12 pence

Brent North Sea crude: UP 0.1 percent at $82.64 per barrel

West Texas Intermediate: UP 0.1 percent at $78.40 per barrel

T.Vitorino--PC