European stocks rise; pound wins boost before Fed minutes

LONDON: European stock markets rose solidly Wednesday, while the pound won support from well-received UK employment data, as investors looked ahead to the release of Federal Reserve minutes for clues on the US interest rate outlook.

"Sterling reversed losses after rallying firmly on stronger-than-expected unemployment and earnings data," said Neil Wilson, senior market analyst at ETX Capital trading group.

Britain's unemployment rate has struck a new 42-year low, official data showed Wednesday, as the uncertainty of Brexit boosts temporary hirings and sent the number of people in jobs to a record high.

The unemployment rate dipped to 4.4 percent in the three months to June to record the lowest level since 1975, the Office for National Statistics (ONS) said in a statement. It had stood at 4.5 percent in the quarter to May.

The data lifted the pound from a one-month low to trade close to $1.29 going into midday dealing.

Elsewhere, calm returned to Asian stock markets, with equities stabilising after a two-day rally, as the dollar strengthened on upbeat US economic data.

Volatility eased as traders focused on the world economy and corporate earnings after a week dominated by the dramatic spike in tensions over North Korea, which triggered a global sell-off before prices bounced back Monday.

The greenback rose after official figures showed US consumers splurged in July, with retail data spurred by strong auto and department store sales.

However, Wall Street finished little changed Tuesday as the strong statistics were offset by disappointing earnings reports.

The Nikkei, which made strong gains Tuesday after finishing at its lowest level for more than three months the previous day, ended marginally down in light trade, even as the weakening yen boosted exporters.

"Volatility declined on international markets ... with US stock markets returning to their moribund state," said Ric Spooner, an analyst at CMC Markets in Sydney.

"This has provided a neutral lead for the local market where the main focus will be on the profit reporting season."

Minutes due later Wednesday from the latest Fed meetings will be scrutinised for clues after policymakers have indicated they may announce plans to reduce the central bank's balance sheet in September and possibly raise interest rates again this year.

On commodities markets, oil prices rose after an industry report indicated stronger demand in the US.

American Petroleum Institute (API) said US commercial crude stockpiles declined by 9.2 million barrels last week, ahead of US Energy Information Administration data later Wednesday which could further buoy prices.

However, lingering concerns remained about oversupply, with US shale oil production expected to remain robust and doubts over compliance with OPEC-led output cuts.

- Key figures around 0950 GMT -

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London - FTSE 100: UP 0.6 percent at 7,430.3 points

Frankfurt - DAX 30: UP 0.8 percent at 12,275

Paris - CAC 40: UP 1.0 percent at 5,191.5

EURO STOXX 50: UP 0.9 percent at 3,491.4

Tokyo - Nikkei 225: DOWN 0.1 percent at 19,729.28 (close)

Hong Kong - Hang Seng: UP 0.9 percent at 27,409.07 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,246.45 (close)

New York - Dow: UP less than 0.1 percent at 21,998.99 (close)

Euro/dollar: UP at $1.1737 from $1.1734 at 2100 GMT Tuesday

Pound/dollar: UP at $1.2896 from $1.2870

Dollar/yen: UP at 110.89 yen from 110.70 yen

Oil - Brent North Sea: UP 32 cents at $51.12 per barrel

Oil - West Texas Intermediate: UP 24 cents at $47.79