Il Nuovo Postiglione - Stocks hesitant as traders eye US inflation, rates

After a brutal 2022, equities worldwide have seen a strong start to the new year thanks largely to Beijing's decision to throw off the shackles of its strict zero-Covid policy, which battered the economy.

While there are concerns about the short-term impact of soaring Covid infections across China, investors are growing increasingly confident in Beijing's pledges of government support, including for the troubled property sector.

But investors' focus has turned to the outlook for US interest rates as the Federal Reserve tries to curb soaring prices without plunging the world's largest economy into recession.

On Monday, San Francisco Fed boss Mary Daly said rates would likely go above five percent before the policy board decides to stop lifting.

Atlanta Fed president Raphael Bostic tipped a similar level though he added that they would not be changed for "a long time".

That dashed hopes that data indicating a US economic pullback and contained wage growth could prompt a halt in rate hikes.

A report on December consumer inflation on Thursday will be closely watched to gauge how Chairman Jerome Powell might respond at the Fed's next policy meeting toward the end of this month, with most investors still expecting a rate pause.

"There is a risk that Fed Chair Powell or economic data contradicts that view, which is why we are erring on the side of caution," said market analyst Fawad Razaqzada at the brokerage StoneX.

European stock markets remained broadly lower in afternoon trading, while Wall Street indices were slightly higher in morning deals after losses on Monday.

Markets are experiencing "a mild bout of profit taking after recent gains", said Richard Hunter, head of markets at Interactive Investor.

- Key figures around 1445 GMT -

New York - Dow: FLAT at 33,528.82 points

London - FTSE 100: DOWN 0.4 percent at 7,696.07

Frankfurt - DAX: DOWN 0.3 percent at 14,747.42

Paris - CAC 40: DOWN 0.7 percent at 6,860.20

EURO STOXX 50: DOWN 0.4 percent at 4,051.03

Tokyo - Nikkei 225: UP 0.8 percent at 26,175.56 (close)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 21,331.46 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,169.51 (close)

Dollar/yen: UP at 131.95 yen from 131.80 yen on Monday

Euro/dollar: UP at $1.0739 from $1.0735

Pound/dollar: DOWN at $1.2151 from $1.2180

Euro/pound: UP at 88.36 pence from 88.11 pence

Brent North Sea crude: UP 1.7 percent at $79.82 a barrel

West Texas Intermediate: UP 1.2 percent at $74.63 a barrel

F.Ciambrone--INP