San Francisco Frontiers - Stock markets stall, oil prices pare back gains

The International Energy Agency said the risk of oil supply disruptions was limited, but added it stood ready to intervene in markets if necessary.

London bucked the red trend, adding 0.3 percent on the back of solid gains for energy giants BP and Shell, but on Wall Street the Dow gave up 0.2 percent two hours into trading and Frankfurt and Paris both closed off by a similar margin.

Oil prices meanwhile pared back earlier gains of some two percent as the US consumer inflation data came in a pip above expectations at 3.7 percent for the 12 months to end September as prices remained stubbornly sticky.

There has been plenty of optimism on equity trading floors in recent days after a US jobs report was neither too hot nor too weak, while a string of central bank decision-makers have suggested they backed a pause in any more monetary tightening.

In the latest remarks, Boston Fed chief Susan Collins said the policy board was being more patient now that rates were at or close to their peak, while Atlanta boss Raphael Bostic said that unless prices surged again, officials did not need to keep hiking.

While the producer price index came in well above estimates Wednesday, analysts said that was seen more as a blip in a generally disinflationary environment.

SPI Asset Management's Stephen Innes suggested "the future direction of events really depends on how economic indicators play out.

"Unless inflation unlikely trends higher or resurgent signs of a demand-supply imbalance in the labour market lead to a wage-price spiral, we think the Fed will continue to tap a less hawkish beat."

Fawad Razaqzada at StoneX said he doubted that "today’s CPI will move the needle in as far as November is concerned, meaning the Fed is likely to remain on pause" regarding rates.

Minutes from the Fed's most recent policy meeting showed they would keep interest rates elevated "for some time" until inflation has been brought to heel and the latest data underlined as much.

Edward Moya at OANDA, looking at the oil outlook, noted the current "geopolitical risks (which) raise the chances that supply/demand flows could see disruptions," leaving crude prices supported through to year end.

- China boost -

Earlier in Asia, the mood was enhanced by news that China's massive sovereign wealth fund had bought stakes in the country's biggest banks, fuelling speculation it could broaden its reach to support beleaguered mainland markets.

Hong Kong and Shanghai equity indices rallied on news that China's Central Huijin Investment -- an arm of the $1.4 trillion China Investment Corp -- had bought $65 million of shares in the country's banking giants.

Analysts said the purchase of stakes in Bank of China, Agricultural Bank of China, China Construction Bank, and Industrial and Commercial Bank of China was aimed at boosting sentiment in mainland markets, which have been hit by worries over the stuttering economy.

- Key figures around 1545 GMT -

New York - Dow: DOWN 0.2 percent at 33,740.43 points

London - FTSE 100: UP 0.3 percent at 7,644.78 points (close)

Frankfurt - DAX: DOWN 0.2 percent at 15,425.03 (close)

Paris - CAC 40: DOWN 0.4 percent at 7,104.53 (close)

EURO STOXX 50: FLAT at 4,200.37

Tokyo - Nikkei 225: UP 1.8 percent at 32,949.66 (close)

Hong Kong - Hang Seng Index: UP 1.9 percent at 18,238.21 (close)

Shanghai - Composite: UP 0.9 percent at 3,107.90 (close)

Euro/dollar: DOWN at $1.0619 from $1.0621 on Wednesday

Pound/dollar: DOWN at $1.2247 from $1.2314

Dollar/yen: UP at 149.70 yen from 149.18 yen

Euro/pound: UP at 86.40 pence from 86.23 pence

Brent North Sea crude: UP 0.5 percent at $86.18 per barrel

West Texas Intermediate: UP 0.2 percent at $83.36 per barrel

J.Peterson--SFF