San Francisco Frontiers - Stock markets diverge on eve of key US inflation data

The tepid performances were a carry-over from Monday on Wall Street, where the Dow fell marginally, breaking a winning streak.

April's US consumer price index (CPI) follows Tuesday's upcoming release of American producer prices.

"We're seeing quiet trading across the board... as traders brace for tomorrow's headline CPI data," noted ARJ Capital analyst Manoj Ladwa.

"A recent downturn in US data has put (rate) easing expectations back in focus," he added.

This week's economic releases follow forecast-beating US figures for the first three months of the year that have seen investors whittle down their expectations for the number of rate cuts -- from six in January to at most two now.

Analysts said a miss in either direction on CPI could have a big impact on markets, with JPMorgan Chase & Co's Andrew Tyler saying "the key risk is a hotter CPI print".

Rodrigo Catril at National Australia Bank said while US inflation was expected to have slowed slightly in April, "any small deviation from the consensus could trigger a meaningful reaction in markets given the current heightened degree of (sensitivity) around inflation and the outlook for Fed policy".

The European Central Bank (ECB) and Bank of England (BoE) are also under the magnifying glass for when they could start to cut rates as inflation cools.

Official data Tuesday showed UK unemployment edging higher in the first quarter, which analysts said was unlikely to alter the outlook for BoE cuts.

UK borrowing costs are expected to be lowered in August but traders have not ruled out a decrease in June, when the ECB is forecast to start trimming interest rates for the eurozone. Shares were little changed in London while they dropped slightly in Paris and Frankfurt.

Shares in Anglo American slid 2.5 percent in London after the mining group announced plans to streamline its business.

The news came one day after it rejected a takeover worth $43 billion from rival BHP.

Anglo on Tuesday said it would offload steelmaking coal, diamond and platinum businesses and focus on critical minerals, as it seeks to benefit shareholders.

In Asian trading Tuesday, leading stock markets closed mixed. Hong Kong's main index fell despite tech titans including Tencent and Alibaba rallying as they prepared to announce their first-quarter earnings.

After the market shut, Alibaba said revenue rose 8 percent in its previous fiscal year.

Meanwhile, the United States said it was hiking tariffs on $18 billion worth of imports from China, targeting critical minerals and other strategic sectors like electric vehicles, batteries and steel.

- Key figures around 1020 GMT -

London - FTSE 100: FLAT at 8,416.58 points

Paris - CAC 40: DOWN 0.2 percent at 8,196.73

Frankfurt - DAX: DOWN 0.2 percent at 18,699.22

EURO STOXX 50: DOWN 0.2 percent at 5,069.60

Tokyo - Nikkei 225: UP 0.5 percent at 38,356.06 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 19,073.71 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,145.77 (close)

New York - Dow: DOWN 0.2 percent at 39,431.51 (close)

Euro/dollar: UP at $1.0793 from $1.0792 on Monday

Pound/dollar: DOWN at $1.2548 from $1.2555

Dollar/yen: UP at 156.38 yen from 156.21 yen

Euro/pound: UP at 86.01 from 85.93 pence

West Texas Intermediate: FLAT at $79.12 per barrel

Brent North Sea Crude: FLAT at $83.39 per barrel

E.Walker--SFF