Volkswacht Bodensee - World stocks retrench, consolidating Fed-fuelled gains

Investors kept away from any big bets on the future direction of US interest rates while the inflation and employment pictures remain cloudy, analysts said.

European and Asian equity markets initially tracked Thursday's record performance on Wall Street, but then turned negative as the mood in New York shifted, a change partly motivated by unease about potentially excessive stock valuations in the tech sector.

Focus for global investors is switching to next week's release of US jobs data, which could provide insights into the Federal Reserve's plans for next year.

Partial data released Thursday showed US jobless claims rose more than expected in the week ended December 6, marking their biggest increase for five and a half years and reinforcing the view of a softening labour market.

Traders welcomed Fed boss Jerome Powell's post-meeting comments Wednesday -- seen as less hawkish than feared -- but the policy board's statement suggested it could hold off from a fourth straight cut in January.

There was some concern about sector valuations after disappointing earnings from sector giants Oracle and Broadcom.

"Oracle and Broadcom reminded the market that while AI demand remains strong, leveraged investments and uncertain monetisation paths are preventing investors from adding exposure at current valuations," said Ipek Ozkardeskaya, Senior Analyst at Swissquote.

The tech-heavy NASDAQ index consequently did worse than the Dow and S&P 500 indexes.

London stock prices underperformed their European peers after official data showed that the UK economy unexpectedly contracted in October.

- Key figures at around 1640 GMT -

New York - Dow: DOWN 0.6 percent at 48,383.22 points

New York - NASDAQ: DOWN 2.0 percent at 23,120

New York: S&P 500: DOWN 1.4 percent at 6,804.16

London - FTSE 100: DOWN 0.6 percent at 9,649.03 (close)

Paris - CAC 40: DOWN 0.2 percent at 8,068.62 (close)

Frankfurt - DAX: DOWN 0.5 percent at 24,186.49 (close)

Tokyo - Nikkei 225: UP 1.4 percent at 50,836.55 (close)

Hong Kong - Hang Seng Index: UP 1.8 percent at 25,976.79 (close)

Shanghai - Composite: UP 0.4 percent at 3,889.35 (close)

Euro/dollar: DOWN at $1.1728 from $1.1741 on Thursday

Dollar/yen: UP at 155.75 yen from 155.58

Pound/dollar: DOWN at $1.3347 from $1.3394

Euro/pound: UP at 87.87 pence from 87.65

Brent North Sea Crude: DOWN 0.4 percent at $61.06 per barrel

West Texas Intermediate: DOWN 0.4 percent at $57.39 per barrel

burs-jh/gv

L.Maurer--VB