Stocks mixed on virus fears, pound up before BoE

LONDON: European and Asian stock markets were mixed Thursday as traders assessed the risks to economic recovery posed by the Delta variant of the coronavirus and by soaring inflation.

London's benchmark FTSE 100 index was flat in late morning deals before the Bank of England's latest interest rate decision and economic forecasts due at 1100 GMT.

The pound was up against the dollar and euro, while main stock indices in China and Hong Kong ended lower.

A major concern is the spike in virus cases in China, the world's second-biggest economy.

Adding to selling pressure are worries that China has the online gaming sector in its crosshairs after last month cracking down on its tech, private tuition and property industries.

With the Bank of England on Thursday expected to keep its key interest rate at a record low of 0.1 percent, all eyes are on its outlook for UK inflation which is rising strongly along with prices worldwide.

While central bank officials around the world have largely said the spikes are temporary as pandemic-hit economies reopen, investors are betting on interest rates rising sooner than expected to keep a lid on soaring inflation.

European stocks open steady before BoE updates

Markets are looking to see when central banks will also begin to scale back their huge emergency stimulus packages.

Following weak US jobs data on Wednesday, Federal Reserve vice chairman Richard Clarida raised the prospects of the US central bank scaling back its huge stimulus, or bond-buying, programme and lifting interest rates as soon as 2023.

The ultra-accommodative measures have been a key driver of the rally in global financial markets from their nadir in March 2020.

Clarida said that as the economy emerges from the pandemic, tapering of the quantitative easing scheme could begin later this year, with analysts tipping a possible move in November.

Meanwhile, US officials indicated that the Delta variant's spread could be affecting the jobs market.

Data by payroll services firms showed US private hiring in July came in at 330,000, the weakest since February, while also less than half the previous month and well below expectations.

Investors are now awaiting official US employment data on Friday, which some analysts had forecast to show a gain of as much as a million jobs.

Key figures around 1015 GMT

London - FTSE 100: FLAT at 7,122.64 points

Frankfurt - DAX 30: UP 0.1 percent at 15,711.78

Paris - CAC 40: UP 0.5 percent at 6,777.62

EURO STOXX 50: UP 0.4 percent at 4,162.46

Tokyo - Nikkei 225: UP 0.5 percent at 27,728.12 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 26,204.69 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,466.55 (close)

New York - Dow: DOWN 0.9 percent at 34,792.67 (close)

Euro/dollar: D0WN at $1.1836 from $1.1841 at 2100 GMT

Pound/dollar: UP at $1.3924 from $1.3891

Euro/pound: DOWN at 85.00 pence from 85.21 pence

Dollar/yen: UP at 109.56 yen from 109.48 yen

Brent North Sea crude: UP 0.7 percent at $70.90 per barrel

West Texas Intermediate: UP 1.0 percent at $68.80 per barrel