European stock markets closed narrowly mixed yesterday as investors consolidated recent gains and waited for their next lead on the economic outlook during the traditionally volatile month of September.
Dealers said the markets finished off their lows as Wall Street steadied in late European trade, suggesting that an early retreat had been overdone.
There were some nerves, they said, as a Sino-US trade dispute over Chinese tyre exports to America threatened to turn nasty in view of the importance of the two countries to the health of the global economy.
At the same time, the underlying tone is positive, with investors confident the corner has been turned on the recession.
"The afternoon recovery does not come as a surprise - this is still a market that has plenty of positive sentiment, which is all too ready to take precedence over any weakness," said Phillip Gillet of IG Index in London.
In London, the FTSE 100 index of leading shares was up 0.15 per cent to 5,018.85 points. In Paris, the CAC 40 slipped 0.11 per cent to 3,730.61 points and in Frankfurt, the DAX was down just 0.07 per cent at 5,620.24 points. Elsewhere in Europe, Amsterdam fell 0.36 per cent, Brussels was down 0.83 per cent, Madrid was up 0.35 per cent, Milan slipped 0.04 per cent and Swiss stocks were off 0.12 per cent.
On Wall Street, the blue-chip Dow Jones Industrial Average was off 0.25 per cent. Earlier yesterday in Asian trade, Tokyo tumbled 2.32 per cent as investors fretted about a stronger yen, which is bad for exporters. Hong Kong lost 1.08 per cent and Sydney was down 1.41 per cent.
In China, however, Shanghai gained 1.24 per cent, still buoyed by last week's strong economic figures and news that the regulator will begin reviewing listings for a new Nasdaq-style board, dealers said.
A "pause is normal after the strength that the markets have seen again over the past week," said Bob Dickey at RBC Wealth Management.
"We are watching for clues on how much of a consolidation to expect," he said, putting any reverse at a few percentage points.
Dealers said news that China filed a World Trade Organisation complaint against Washington over tyre tariffs caused some unease on fears it could escalate.
"The prospects of a trade war with China has made traders considerably nervous," said Joseph Hargett at Schaeffer's Investment Research.
"What we have seen today has been pure profit taking," said analyst Joshua Raymond at spread-betting firm City Index.