San Francisco Frontiers - Stock markets diverge after Wall Street tech sell-off

Paris was flat and Frankfurt fell in midday deals, with European defence stocks extending losses on hopes for progress in Ukraine peace talks.

London's FTSE 100 index and the pound edged up after UK inflation rose more than expected in July, dampening bets that the Bank of England will cut rates again this year.

A "US tech sell-off drags European markets into the red," noted Victoria Scholar, head of investment at Interactive Investor.

Several major technology firms, including Nvidia, Palantir and Oracle, lost market share on Wall Street Tuesday on fears that their recent rally may have run too far.

The sell-off was "sparked by concerns about overexcitement and overvaluations in AI stocks," Scholar added.

In company news, shares in mining giant Anglo American fell around two percent in London after US group Peabody Energy walked away from a $3.8 billion deal to buy its steelmaking coal business.

Investors eagerly awaited a speech on Friday by US Federal Reserve Chair Jerome Powell at the annual retreat of global central bankers in Jackson Hole, Wyoming.

Powell could provide more clues about a widely expected interest rate cut at the Fed's next policy meeting in September, after data last week provided a mixed picture of inflation in the United States.

Traders have also been watching a recent diplomatic whirlwind aimed at resolving the war in Ukraine, after President Donald Trump's high-stakes meeting with Russian counterpart Vladimir Putin in Alaska.

Eyes are now on potential face-to-face talks between Putin and Ukrainian President Volodymyr Zelensky, who has said he is ready for such a meeting.

Oil prices rose, recovering part of the losses from the previous day, as investors monitored progress on Ukraine peace talks.

In Asia, Tokyo closed down 1.5 percent after official data showed Japanese exports suffered their steepest drop in more than four years last month as US tariffs weighed.

Hong Kong advanced and Shanghai closed up one percent.

Hong Kong's stock exchange operator posted record half-year revenue, riding a renewed surge in listings and trading activity at the Chinese finance hub.

- Key figures at around 1040 GMT -

London - FTSE 100: UP 0.2 percent at 9,211.48 points

Paris - CAC 40: FLAT at 7,980.48

Frankfurt - DAX: DOWN 0.3 percent at 24,348.48

Tokyo - Nikkei 225: DOWN 1.5 percent at 42,888.55 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 25,165.94 (close)

Shanghai - Composite: UP 1.0 percent at 3,766.21 (close)

New York - Dow: FLAT at 44,922.27 (close)

Euro/dollar: UP at $1.1654 from $1.1646 on Tuesday

Pound/dollar: UP at $1.3499 from $1.3489

Dollar/yen: DOWN at 147.43 yen from 147.64 yen

Euro/pound: DOWN at 86.30 pence from 86.33 pence

West Texas Intermediate: UP 1.0 percent at $63.00 per barrel

Brent North Sea Crude: UP 1.1 percent at $66.49 per barrel

H.Reyes--SFF