Volkswacht Bodensee - European stocks drift as traders weigh earnings, rates outlook

London stocks edged higher, aided partly by a ten-percent surge in retail stalwart M&S after it announced bumper profits and a return to the first shareholder dividend in four years.

Paris also rose with lender Credit Agricole jumping two percent after logging a solid third-quarter performance, but Frankfurt flatlined with Commerzbank falling 2.5 percent despite lifting its annual guidance and posting rising quarterly profit.

"European markets are hovering around the flatline as investors digest a slew of earnings reports," said Victoria Scholar, head of investment at trading firm Interactive Investor.

Oil prices sank to levels last seen in July on heightened demand fears arising from the weak global economy.

Crude had already plunged about four percent the previous day on news that China's exports fell at a faster pace than predicted in October. That stoked fresh concern over its appetite for energy.

"Oil prices tumbled head over heels," noted analyst Stephen Innes at SPI Asset Management.

"This sharp decline was primarily driven by concerns about the outlook of global demand due to weak data points from China and other economies."

Asian stock markets meanwhile wobbled Wednesday with US monetary policy is in focus after the US central bank hinted last week at no more tightening.

However, Fed officials refuse to commit one way or the other for now, instead saying they want to see more evidence that inflation is on a true downward slope and the labour market has softened enough.

Data on Friday that showed jobs creation was slowing -- but not too much to cause worry about the economy -- instilled confidence the Fed was on course to deliver a soft landing for the economy and avoid a recession.

Chicago Fed boss Austan Goolsbee gave little away Tuesday, saying he was lasering in on getting control of prices.

"We've got to get inflation down -- that's the number-one thing," he told CNBC. "I'm absolutely hammering that's what we should be watching."

He added that it was looking possible to do that without hurting the economy.

- Key figures around 1150 GMT -

London - FTSE 100: UP 0.1 percent at 7,415.37 points

Paris - CAC 40: UP 0.2 percent at 7,001.53

Frankfurt - DAX: FLAT at 15,152.93

EURO STOXX 50: UP 0.1 percent at 4,157.33

Tokyo - Nikkei 225: DOWN 0.3 percent at 32,166.48 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 17,568.46 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,052.37 (close)

New York - Dow: UP 0.2 percent at 34,152.60 (close)

Euro/dollar: DOWN at $1.0663 from $1.0700 on Tuesday

Pound/dollar: DOWN at $1.2246 from $1.2300

Dollar/yen: UP at 150.75 yen from 150.37 yen

Euro/pound: UP at 87.07 pence from 86.99 pence

Brent North Sea crude: DOWN 0.7 percent at $81.02 per barrel

West Texas Intermediate: DOWN 0.8 percent at $76.76 per barrel

G.Haefliger--VB