European stocks wobble before Fed minutes

LONDON: European equities turned mixed Wednesday, despite broad gains across most of Asia, as dealers waited on minutes from Federal Reserve's most recent policy meeting.

London's stock market won 0.2 percent, while Frankfurt dipped 0.1 percent and Paris turned flat in late morning trade.

Most Asian indices rose, with Shanghai recovering from early selling after Moody's cut China's credit rating on worries about its growing debt mountain.

"With the exception of Moody's miners-dragging downgrading of China, not a lot has happened this Wednesday," noted Spreadex analyst Connor Campbell.

"The only real notable event in the US calendar is not until this evening, when the latest Federal Reserve meeting minutes are released."

Investors hope to get a handle on the Fed's plans for interest rate rises following a number of weak indicators lately.

Among the weak points is inflation, which Minneapolis Fed president Neel Kashkari described as going in the wrong direction.

Moody's ratings agency said its downgrade on the world's number two economy was prompted by the likelihood of a "material rise" in debt throughout the economy and as potential growth slows.

Beijing has tried to address a toxic brew of unregulated and risky lending, which is increasingly seen as a threat to global financial stability.

- 'Relatively unfazed' -

"Markets have largely shrugged off Moody's downgrade of China's credit rating overnight, with even Chinese stocks and the yuan being relatively unfazed," noted Oanda analyst Craig Erlam.

"We saw some initial weakness in Chinese stocks and the currency immediately following the announcement but both quickly reversed the moves to trade positive on the day.

"This sentiment has been shared by investors elsewhere who have also shrugged off the downgrade, with the possible surprise factor being offset by the fact that concerns about Chinese debt and growth are not exactly new."

China's economy grew last year at its slowest pace in a quarter of a century and there are expectations it will continue to ease in coming years.

There was little carry-over from Monday's terror attack in Manchester that killed 22 people including children at a pop concert.

"The Manchester terrorist attack induced a note of caution at the start of (Tuesday's) trading but equity markets continued their upward trend thereafter," noted VTB Capital analyst Neil MacKinnon.