Volkswacht Bodensee - European stocks rise, Wall St futures drop as US shutdown begins

The prospect of services in the United States being closed pushed gold to another record high over $3,895.

In Asia, Tokyo's stock market sank, while Hong Kong and Shanghai were closed for holidays.

European markets were lifted by pharmaceutical shares after Pfizer was granted reprieve from President Donald Trump's tariffs by agreeing to lower drug prices in the United States.

Trump also announced plans to unveil a website to allow consumers to directly purchase some medications from manufacturers at discounted rates.

While details remain thin, shares in British pharma giant AstraZeneca rose more than six percent and GSK was up almost three percent in London.

The dollar remained under pressure on concerns caused by the US government beginning to shut down Wednesday.

Democrats and Republicans failed to break a budget impasse, with talks hinging on health care funding.

"Historically shutdowns have been bad for the US dollar, bad for US equities, and bad for bonds too," said Emma Wall, chief investment strategist at Hargreaves Lansdown.

"Should the shutdown remain unresolved it is likely to drive money outside of the US to markets with more certainty," she added.

While most shutdowns end after a short period, investors were concerned it could prevent the release Friday of the key non-farm payrolls report -- a crucial guide for the Fed on rate decisions.

The closure will see non-essential operations halted, leaving hundreds of thousands of civil servants temporarily unpaid, and many social safety net benefit payments potentially disrupted.

Trump threatened to punish Democrats during any stoppage by targeting progressive priorities and forcing mass public sector job cuts.

"Shutdowns have delivered bouts of volatility, but the precedent has been that weakness tends to be short-lived," noted Joshua Mahony, chief market analyst at Scope Markets.

Futures on all three main indexes in New York were in the red.

India's rupee also made small inroads as the country's central bank decided against cutting interest rates, despite inflation remaining low, but the unit continued to hover around record lows against the greenback.

The South Asian currency has been hit by concerns over stalled trade talks with Trump that will soften painful tariffs, while Washington's strict immigration measures have added to worries.

The two sides remain in talks despite sharp disagreements over agricultural trade and New Delhi's purchases of Russian oil.

In company news, Australian mining titan BHP fell 2.5 percent following reports China had told steelmakers to temporarily stop buying seagoing, dollar-denominated cargoes from the firm, as part of a pricing dispute.

- Key figures at around 1100 GMT -

London - FTSE 100: UP 0.7 percent at 9,413.05 points

Paris - CAC 40: UP 0.4 percent at 7,924.93

Frankfurt - DAX: UP 0.5 percent at 24,003.37

Tokyo - Nikkei 225: DOWN 0.9 percent at 44,550.85 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

New York - Dow: UP 0.2 percent at 46,397.89 (close)

Euro/dollar: DOWN at $1.1729 from $1.1739 on Tuesday

Pound/dollar: UP at $1.3478 from $1.3448

Dollar/yen: DOWN at 147.10 yen from 147.86 yen

Euro/pound: DOWN at 87.01 pence from 87.29 pence

West Texas Intermediate: DOWN 0.5 percent at $62.05 per barrel

Brent North Sea Crude: DOWN 0.5 percent at $65.70 per barrel

H.Gerber--VB