- England captain Stokes back from injury for second Pakistan Test
- Shanghai stocks gain after stimulus briefing as markets rally
- Shanghai stocks gain after stimulus briefing as Asian markets rally
- South Korea military says 'fully ready' as drone flights anger North
- Pakistan 'vigilantes' behind rise in online blasphemy cases
- Nearly 90, but opera legend Kabaivanska is still calling tune
- Smith experiment as Test opener over, Green out of India series
- With inflation down, ECB eyes faster tempo of rate cuts
- Is life possible on a Jupiter moon? NASA goes to investigate
- Dodgers crush Mets 9-0 in MLB playoff series opener
- South Korea military says 'fully ready' as drone tensions soar
- Cummins back, Marsh and Head out of Pakistan ODI series
- Shanghai stocks swing after stimulus briefing as most of Asia rises
- New Zealand's Latham promises 'no fear' as he takes charge for India Tests
- Kyrgios vows to 'shut up' doubters with December comeback
- Public hearings start into death of Brit by Russian nerve agent
- Ex-Stasi officer faces verdict over 1974 Berlin border killing
- Role of government, poverty research tipped for economics Nobel
- 'Stolen satire' feeds US election misinformation
- Rookie McCarty captures first PGA Tour title in Black Desert Championship
- Australia all-rounder Green ruled out of India Test series
- Seeing double in Nigeria's 'twins capital of the world'
- UK FM to attend EU foreign affairs talks for first time in 2 years
- Carter, Billups among 13 new Basketball Hall of Fame inductees
- Ravens rip Commanders as Lions lose NFL sacks leader in win
- Hezbollah drone strike kills four, wounds dozens at Israeli base
- China says launches military drills around Taiwan
- Stewart leads Liberty past Lynx to level WNBA Finals
- England return to winning ways in Nations League, Austria thrash Norway
- UN chief says attacks on UNIFIL 'may constitute a war crime'
- Ravens outlast Commanders while Bucs batter Saints in NFL
- Dozens hurt in Israel as Hezbollah claims drone strike
- England deserve 'world class' coach: Carsley
- Burkina Faso win to become first qualifiers for 2025 AFCON
- AC Milan's Pulisic among five out for USA match in Mexico
- France's Amandine Henry retires from international football
- Centre-left set to win pro-Ukraine Lithuania's vote
- India's World Cup hopes in Pakistan hands after Australia defeat
- Zelensky says NKorea sending troops to Russian army
- England beat Finland to get back on track
- King and Lewis propel West Indies to T20 triumph over Sri Lanka
- Pre-Halloween 'Terrifier' lands atop North America box office
- 'I still plan to compete and play next season,' says Djokovic
- Harris, Trump seek advantage in knife-edge election battle
- Chepngetich shatters women's marathon world record in Chicago
- Kamindu and Asalanka power Sri Lanka to 179 against West Indies
- Chepngetich shatters women's marathon world record as Korir wins in Chicago
- Spain send injured Yamal home 'to prioritise player's health'
- In milestone, SpaceX 'catches' megarocket booster after test flight
- Iraq walks fine line with pro-Iran factions to avoid war
Stock markets diverge as traders temper rate-cut bets
Major stock markets diverged Tuesday, with analysts warning November's rally fuelled by bets on interest rate cuts may have gone too far.
After markets in Shanghai and Hong Kong closed, Moody's said it had downgraded its outlook on China's credit rating citing rising debt in the world's second-largest economy.
"The markets are a touch nervous ahead of US jobs figures this week which could either reinforce or undermine the narrative that interest rates have peaked and rate cuts are on the way," said AJ Bell investment director Russ Mould.
"Signs the labour market is heating up again would put any hopes of a Santa rally into the end of the year under threat."
Asia's main stock markets closed with sizeable losses and London was lower nearing the half-way stage. Eurozone indices rose, however.
The price of haven investment gold dropped after striking a record high Monday as the dollar weakens on expectations for a rate cut.
Bitcoin reached $42,393.19, a fresh high since April last year.
European gas prices hit the lowest level in nearly two months, bringing some relief amid cold weather.
Stock markets surged last month as slowing inflation and a softer US job markets stoked expectations that the Federal Reserve would early next year begin loosening monetary policy.
Those hopes were boosted Friday when Fed chief Jerome Powell said rates were "well into restrictive territory".
More than one percentage point of reductions through to next December have been priced in by futures traders, according to Bloomberg News.
But observers said the euphoria may have caused investors to get ahead of themselves and the next few weeks could be a little bumpy, while they remained broadly upbeat about the new year.
Morgan Stanley strategist Michael Wilson said in a note that this month could see "near-term volatility in both rates and equities" before positive seasonal trends and "January effect" provide a lift next month.
"The biggest near-term risk for the markets could simply be that after a phenomenal one-month rally, a period of consolidation may be a necessary breather," said UBS Global Wealth Management's Jason Draho.
"A lot of good news is priced in, and investors seeing little imminent downside risk does make the markets vulnerable to even small disappointments."
Goldman Sachs strategists said "markets are approaching the limits of what can plausibly be priced in without attaching material odds of a recession in the near term".
Traders were awaiting the release Friday of key US jobs data, with a miss to the downside of expectations likely to ramp up optimism for a rate cut in early 2024. However, a forecast-beating reading could jolt markets.
That is followed next week by the Fed's policy meeting. Most watchers are tipping it to stand pat on rates, though its statement will be parsed for any clues about plans for the next few months.
- Key figures around 1115 GMT -
London - FTSE 100: DOWN 0.6 percent at 7,469.21 points
Paris - CAC 40: UP 0.3 percent at 7,353.76
Frankfurt - DAX: UP 0.3 percent at 16,447.60
EURO STOXX 50: UP 0.3 percent at 4,428.01
Tokyo - Nikkei 225: DOWN 1.4 percent at 32,775.82 (close)
Hong Kong - Hang Seng Index: DOWN 1.9 percent at 16,327.86 (close)
Shanghai - Composite: DOWN 1.7 percent at 2,972.30 (close)
New York - Dow: DOWN 0.1 percent at 36,204.44 (close)
Euro/dollar: DOWN at $1.0836 from $1.0839 on Monday
Pound/dollar: UP at $1.2644 from $1.2632
Dollar/yen: DOWN at 146.97 yen from 147.19 yen
Euro/pound: DOWN at 85.70 pence from 85.77 pence
West Texas Intermediate: UP 0.6 percent at $73.45 per barrel
Brent North Sea crude: UP 0.4 percent at $78.36 per barrel
L.Durand--AMWN