Il Nuovo Postiglione - Stocks diverge tracking US election battle, earnings

Focus was also on corporate earnings as traders looked ahead to key US inflation data due Friday.

The dollar traded mixed versus main rivals, while oil prices dipped.

Joe Biden's decision to drop out of the presidential election race and endorse Vice President Kamala Harris had little major impact on sentiment, analysts said, though there is much debate about who she chooses as her running mate.

"Politics could be less of a driver for markets for the rest of the summer now that the Democrats are back in the race," noted Kathleen Brooks, research director at XTB.

Harris and Trump "are known quantities, so whoever wins the race for the White House, the market, in some ways, knows what to expect.

"Harris may continue the policies of Joe Biden, and everyone expects... Trump to cut taxes and to implement trade barriers" should he become president, Brooks added.

In the meantime, optimism for another healthy earnings season, particularly among semiconductor makers, saw a bounce on Monday, with market darling Nvidia among the big winners along with Broadcom and Texas Instruments.

This week sees releases by Google parent Alphabet and electric carmaker Tesla. Swedish music streaming giant Spotify reported a 12 percent increase in subscribers to 246 million in the second quarter along with a 266-million-euro operating profit.

Tech firms have led the rally in markets this year, helping push all three main New York indices to multiple record highs, thanks also to expectations the Federal Reserve will cut borrowing costs.

On Tuesday, Europe's main stock markets rose after Asia's major indices closed lower.

The US central bank's monetary policy is back in focus ahead of Friday's report on personal consumption expenditure, the Fed's favoured gauge of inflation.

The figure has come down steadily in recent months, giving central bank officials room to begin cutting rates, with bets on a September move increasing.

- Key figures around 1030 GMT -

London - FTSE 100: UP 0.1 percent at 8,210.65 points

Paris - CAC 40: UP 0.2 percent at 7,640.54

Frankfurt - DAX: UP 1.0 percent at 18,589.86

EURO STOXX 50: UP 0.8 percent at 4,937.23

Tokyo - Nikkei 225: FLAT at 39,594.39 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 17,469.36 (close)

Shanghai - Composite: DOWN 1.7 percent at 2,915.37 (close)

New York - Dow: UP 0.3 percent at 40,415.44 (close)

Euro/dollar: DOWN at $1.0859 from $1.0890 on Monday

Pound/dollar: DOWN at $1.2892 from $1.2929

Dollar/yen: DOWN at 156.11 yen from 157.08 yen

Euro/pound: UP at 84.22 pence at 84.20 pence

West Texas Intermediate: DOWN 0.1 percent at $78.33 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $82.34 per barrel

A.Rastelli--INP