European stocks carve steady path on Trump, Brexit

The letter formally notifying Britain's desire to leave the European Union triggered two years of Brexit talks, sending sterling lower

Global stock markets edged higher Thursday, buoyed by firmer prices on Wall Street, but investors remained cautious overall amid lingering uncertainty over President Donald Trump's policy agenda and the outlook for Britain's Brexit negotiations with the European Union, traders said.

"Stocks are still in a bit of a holding pattern with traders lacking a bit of conviction," said Jasper Lawler at London Capital Group.

"A positive open in the US, helped by further recovery in crude oil prices improved sentiment in European markets."

London's FTSE-100 ended the session little changed, while Frankfurt's DAX 30 and the CAC 40 in Paris both added around 0.4 percent.

The day before, markets had barely flinched when Britain formally notified the EU of its intention to quit the 28-nation bloc, as investors had largely priced in "Brexit" since last year's referendum, dealers said.

But there would be downside risks if the negotiations -- expected to last at least two years -- turned nasty, analysts said.

Nevertheless, for the time being, the situation was "very calm on the stock markets at the end of the quarter," said analysts at French brokerage Aurel BGC.

"Indices remain at very high levels, but activity is very low."

Earlier in Asia, stock prices had fallen as Chinese authorities tightened liquidity in the financial system of the world's second-largest economy.

All eyes were now turning to different economic data scheduled for publication in the US, said analysts at Wells Fargo.

US growth in the fourth quarter was nudged up to 2.1 percent from the prior 1.9 percent estimate, according to official government data.

Back in Europe, with Brexit negotiations likely to drag on for at least two years, investors may now focus on upcoming elections in a number of countries, such as the presidential elections in France, dealers said.

"Now the focus is slowly turning away from Brexit to a potential Frexit with upcoming French elections in April," said Fawad Razaqzada of Forex.com.

"In the event that support for Marine Le Pen -– the leader of the far right-wing National Front party -– increases, so too will anxiety among market participants, and serious question marks will be raised about the future of the whole EU project."

Given this uncertainty, the euro could come under pressure in the coming weeks and months, the analyst suggested.

- Key figures at 1545 GMT -

New York - Dow: UP 0.3 percent at 20,721.22 points

London - FTSE 100: DOWN 0.06 percent at 7,369.52 (close)

Frankfurt - DAX 30: UP 0.4 percent at 12,256.43 (close)

Paris - CAC 40: UP 0.4 percent at 5,089.64 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,481.58 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 19,063.22 (close)

Hong Kong - Hang Seng: DOWN 0.4 percent at 24,301.09 (close)

Shanghai - Composite: DOWN 1.0 percent at 3,210.24 (close)

Euro/dollar: DOWN at $1.0728 from $1.0737

Pound/dollar: DOWN at $1.2488 from $1.2505

Dollar/yen: FLAT at 111.29 yen

Oil - Brent North Sea: UP 61 cents at $53.15 per barrel

Oil - West Texas Intermediate: UP 85 cents at $50.36

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