Il Nuovo Postiglione - Stocks struggle to extend Fed-fuelled rally

On Wall Street the Dow was flat, while the tech-heavy Nasdaq rose less than half of one percent two hours into the session after Asia had earlier mainly advanced.

Europe diverged amid news of slumping eurozone business activity as Frankfurt ended flat while Paris rounded out the week slightly ahead for a record close but London lost one percent.

Markets faced a busy week for global interest rates after the Federal Reserve pivoted Wednesday to signal it would cut next year.

Both the Bank of England and the European Central Bank distanced themselves on Thursday from cutting any time soon.

New York federal reserve President John Williams added to the caution, telling CNBC: "We aren't really talking about rate cuts right now."

The dollar wavered after diving in initial reaction to the Fed's plans, while oil prices dipped a day after spiking more than three percent in value.

The BoE and ECB Thursday froze borrowing costs, in line with the Fed.

But both warned that the fight against inflation was not over and doused any hopes of early rate cuts next year amid talk of as many as half a dozen by the Fed.

- 'Pivot party' -

"The ECB and the BoE refused to join the Fed-thrown pivot party," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"Both (ECB president) Christine Lagarde and (BoE governor) Andrew Bailey declined to discuss cutting interest rates, judging a policy loosening too early as the inflation threat looms," she added, noting also that Norway had sprung a surprise rate hike.

"As a result, the rally in global stock and bond markets slowed."

Nevertheless, the Fed's more-dovish-than-expected pivot has set up equities for a Santa rally, with a string of data suggesting inflation in the world's top economy was being tamed while avoiding recession.

Now the debate turns to the timing of the first cut and how many there will be. Some experts have suggested there could be more than the three envisaged in the Fed's "dot plot". JPMorgan economists see five.

The prospect of borrowing conditions being easier next year helped push the Dow to a second straight record high Thursday, while the S&P 500 is just shy of its own all-time peak, but Friday saw scant movement.

Asian indices were also buoyed by news that China had injected more cash than expected into the financial system.

Hong Kong led the advances, surging more than two percent, while Tokyo rebounded from the previous day's loss as the yen's rally against the dollar faded, though Shanghai gave up early gains to end down.

Dealers are now keenly awaiting the Bank of Japan's policy decision next week after boss Kazuo Ueda suggested officials could soon move away from their ultra-loose policy.

- Key figures around 1645 GMT -

New York - Dow: UP 0.1 percent at 37,270.90 points

London - FTSE 100: DOWN 1.0 percent at 7,576.36 (close)

Paris - CAC 40: UP 0.3 percent at 7,596.91 (close)

Frankfurt - DAX: FLAT at 16,751.54 (close)

EURO STOXX 50: UP 0.3 percent at 4,554.47

Tokyo - Nikkei 225: UP 0.9 percent at 32,970.55 (close)

Hong Kong - Hang Seng Index: UP 2.4 percent at 16,792.19 (close)

Shanghai - Composite: DOWN 0.6 percent at 2,942.56 (close)

Euro/dollar: DOWN at $1.0905 from $1.0996

Dollar/yen: DOWN at 141.81 yen from 141.87 yen

Pound/dollar: DOWN at $1.2697 from $1.2764

Euro/pound: DOWN at 85.87 pence from 86.12 pence

West Texas Intermediate: DOWN 0.3 percent at $71.34 per barrel

Brent North Sea crude: DOWN 0.2 percent at $76.45 per barrel

A.Mariconda--INP