San Francisco Frontiers - Stocks drift higher while oil prices jump

The dollar strengthened as bond yields rose, following some recent weakness as traders expect the Federal Reserve to pause its hiking of interest rates.

The price of the main international oil contract, Brent crude, hit $90 per barrel for the first time this year, after the announcements by Russia and Saudi Arabia.

Russia it would extend its oil export cuts of 300,000 barrels per day until the end of the year, while Saudi Arabia said it would maintain its production cut of 1 million barrels per day to the end of the year as well.

Oil prices have been creeping up as demand rises as the global economy continues to expand and Russia and Saudi Arabia reduce supplies in addition to cuts agreed by OPEC and allied oil exporting nations.

The increase in prices has sparked concern that they will soon begin to hit demand as many countries are struggling to maintain growth due to high interest rates meant to bring down high inflation.

The price of Brent crude rose 1.5 percent to $90.37 per barrel, while the main US contract, WTI, jumped two percent to $87.24 per barrel.

Asian stocks finished mostly lower after a report showed China's services sector grew last month at a much slower pace than expected.

The Caixin Services PMI came in at 51.8 in August, down from 54.1 in July.

While the figure above 50 still indicates an expansion, it suggests growth is decelerating in the world's largest economy.

"The recovery in China's services sector, or even consumption, is ongoing but not as strong as people had expected," said Larry Hu of Macquarie Group.

"People are not very optimistic about their future income due to the economic woes, and so they tend to save more."

Hong Kong's stocks index closed down more than two percent -- though struggling mainland developers including Evergrande and Sunac soared.

Shanghai was also well in the red.

There were losses in Sydney as the Australian central bank held interest rates for a third successive meeting, while Seoul, Singapore, Wellington and Jakarta were also off.

There was little reaction to reports that struggling developer Country Garden had paid interest on its dollar-denominated bonds, avoiding a messy default, but with the firm's cash woes showing no sign of ending as more loans must be serviced in coming weeks.

Recent policy announcements out of Beijing have helped lighten the mood on trading floors after months of dour data indicating the country's post-Covid recovery has hit a wall.

- Key figures around 1330 GMT -

New York - Dow: FLAT at 34,829.34 points

London - FTSE 100: UP 0.3 percent at 7,472.95

Frankfurt - DAX: UP less than 0.1 percent at 15,836.59

Paris - CAC 40: UP less than 0.1 percent at 7,282.83

EURO STOXX 50: UP 0.1 percent at 4,285.71

Tokyo - Nikkei 225: UP 0.3 percent at 33,036.76 (close)

Hong Kong - Hang Seng Index: DOWN 2.1 percent at 18,456.91 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,154.37 (close)

Euro/dollar: DOWN at $1.0744 from $1.0790 on Monday

Pound/dollar: DOWN at $1.2579 from $1.2621

Dollar/yen: UP at 147.33 yen from 146.45 yen

Euro/pound: DOWN at 85.42 pence from 85.50 pence

West Texas Intermediate: UP 2.0 percent at $87.24 per barrel

Brent North Sea crude: UP 1.5 percent at $90.37 per barrel

burs-rl/cw

A.Evans--SFF