European stock markets mostly higher

LONDON: Europe's main stock markets mostly gained Tuesday, brushing off a drop in Tokyo as US-North Korea tensions flared once more.

Investors were looking ahead to Wednesday, when the government of French President Emmanuel Macron unveils its first annual budget against a background of wanting to cut taxes while also slashing the state deficit.

Nearing the half-way stage, Frankfurt's DAX 30 index was up 0.2 percent compared with the close Monday and the Paris CAC 40 won 0.1 percent. London was flat.

The euro remained pressured as investors worried about looming political infighting in Germany after an election that won Angela Merkel a fourth term as chancellor, but gave a hard-right opposition party parliamentary seats for the first time.

"It's been a tricky, scrappy Tuesday... (with) the markets struggling to find any real direction," noted Spreadex analyst Connor Campbell.

"Just like on Monday, the spotlight has largely been on the euro, which is continuing to suffer in the aftermath of Sunday's German election."

Also in focus Tuesday for Germany and France was the maker of iconic TGV trains set to announce a merger with industrial leader Siemens in a giant and politically tricky deal that will create a new European champion.

The board of partly state-controlled Alstom, the manufacturer of French high-speed trains which are a source of national pride, is set to meet on Tuesday to discuss the tie-up with its German competitor.

- Asia beats retreat -

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Earlier Tuesday, Asian stock markets mostly retreated while haven assets such as gold and the yen won support after Pyongyang accused President Donald Trump of declaring war on the country and warned it could shoot down US bombers.

The dollar held its ground following conflicting comments from top Federal Reserve officials over the timing of the bank's next rise for US interest rates.

Oil prices meanwhile retreated following Monday's surge. The rally had come after Turkish President Recep Tayyip Erdogan threatened to block key crude exports from Iraq's Kurdish region, which is holding an independence referendum.

Brent jumped nearly four percent to its highest level since July 2015, while US benchmark West Texas Intermediate piled on three percent on Monday.

Greg McKenna, market strategist at AxiTrader, said crude prices were supported also by signs that a push by OPEC and other key producers aimed at cutting output was bearing fruit.

"Oil markets have a better tone at the moment as the notion that the OPEC/non-OPEC production deal is gaining traction and the market is rebalancing," he said.

- Key figures around 1015 GMT -

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London - FTSE 100: FLAT at 7,299.45 points

Frankfurt - DAX 30: UP 0.2 percent at 12,621.30

Paris - CAC 40: UP 0.1 percent at 5,270.31

EURO STOXX 50: UP 0.1 percent at 3,540.17

Tokyo - Nikkei 225: DOWN 0.3 percent at 20,330.19 (close)

Seoul - Kospi: DOWN 0.3 percent at 2,374.32 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 27,513.01 (close)

Shanghai - Composite: UP 0.1 percent at 3,343.58 (close)

New York - DOW: DOWN 0.2 percent at 22,296.09 (close)

Euro/dollar: DOWN at $1.1807 from $1.1846 at 2100 GMT

Dollar/yen: UP at 111.70 yen from 111.68 yen

Pound/dollar: UP at $1.3480 from $1.3465

Oil - Brent North Sea: DOWN 39 cents at $58.63 per barrel

Oil - West Texas Intermediate: DOWN 26 cents at $51.96