Volkswacht Bodensee - US stocks mixed after inflation data as London strikes record

Investors had been waiting eagerly for the latest inflation data, as the US Federal Reserve has indicated that it is looking for pricing pressures to ease before relenting in its campaign of raising interest rates.

While the consumer price index (CPI), an important inflation gauge, eased from last year's decades-high levels, the dip to an annual rate of 6.4 percent in January was still well above policymakers' two percent target.

The 0.5 percent month-on-month rise was higher than the 0.1 percent gain in December, driven by rising rent and gasoline costs.

"The key takeaway from the report is that there has been a clear deceleration from peak inflation," said market analyst Patrick O'Hare at Briefing.com.

"However, the inflation rates are not nearly low enough to suggest the Fed would even be thinking about cutting rates this year," he added.

Stocks have recently rallied on hopes that moving past peak inflation would allow the Fed to pause and maybe even begin reversing rate hikes this year.

Higher prices for food, shelter, energy and other items suggest that the hoped-for "disinflation" has not arrived, said Steve Sosnick, chief strategist at Interactive Brokers.

But he described sentiment as broadly bullish.

"Right now the momentum in the stock market is generally positive and stock traders are looking for an excuse to rally," Sosnick said.

US indices were mixed at the end of the day, with the Dow lower but the Nasdaq advancing.

The dollar, which had slid against main rivals ahead of the data, rebounded before wobbling against the euro.

- FTSE flirts with 8,000 -

In London, the benchmark FTSE 100 shares index struck an all-time high of 7,996.35 points in morning deals after reaching new heights in recent sessions.

"The tailwinds from another decent market performance in the US overnight have given the FTSE another boost, propelling it to a new record high and towards the psychologically important 8,000 barrier," Interactive Investor analyst Richard Hunter told AFP.

He added that the index "continues to attract investment interest." Its exposure to banks and energy companies still see the benefits of rising interest rates and a recovering Chinese economy respectively.

Shares in Vodafone won more than three percent after US telecoms giant Liberty Global snapped up a near five-percent stake in its British rival but ruled out a takeover.

After spending most of the day higher, London, Frankfurt and Paris stocks ended near their starting levels.

Asian equity indices closed on a mixed note after a shaky couple of weeks.

- Key figures around 2140 GMT -

New York - Dow: DOWN 0.5 percent at 34,089.27 (close)

New York - S&P 500: DOWN less than 0.1 percent at 4,136.13 (close)

New York - Nasdaq: UP 0.6 percent at 11,960.15 (close)

London - FTSE 100: UP 0.1 percent at 7,953.85 (close)

Frankfurt - DAX: DOWN 0.1 percent at 15,380.56 (close)

Paris - CAC 40: UP 0.1 percent at 7,213.81 (close)

EURO STOXX 50: DOWN 0.1 percent at 4,238.76 (close)

Tokyo - Nikkei 225: UP 0.6 percent at 27,602.77 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 21,113.76 (close)

Shanghai - Composite: UP 0.3 percent at 3,293.28 (close)

Euro/dollar: DOWN at $1.0739 from $1.0723 on Monday

Dollar/yen: UP at 133.07 yen from 132.42 yen

Pound/dollar: UP at $1.2176 from $1.2139

Euro/pound: DOWN at 88.17 pence from 88.33 pence

Brent North Sea crude: DOWN 1.2 percent at $85.58 per barrel

West Texas Intermediate: DOWN 1.3 percent at $79.06 per barrel

burs-jmb/bys

O.Lorenz--BTB