Stock Markets Mostly Higher as Dealers Brush Off Trump Fear

World stock markets mostly advanced Thursday, with analysts playing down U.S. President Donald Trump's government shutdown threat as they looked ahead to a key central bankers' meeting.

European indices made solid gains following advances across much of Asia, as investors brushed off Wednesday's losses on Wall Street. 

London's benchmark FTSE 100 index was up 0.4 percent nearing midday, while the pound recovered from two-month lows versus the dollar as traders reacted to official data confirming that Britain's economy grew 0.3 in the second quarter despite high inflation and uncertainty over Brexit.

"The pound fell initially after the data but quickly recovered to trade off its lows just below 1.28 against the dollar," noted Craig Erlam, senior market analyst at Oanda trading group.

Among individual share prices, troubled UK lender Provident Financial continued its recovery, surging 20 percent after losing two-thirds of its value Tuesday on a profits-warning. 

Across the Atlantic, Trump on Wednesday warned in a firebrand speech to supporters that he was ready to shut down federal business to force Congress to pay for his controversial Mexican border wall, while also threatening to tear up a trade agreement with Canada and Mexico.

The outburst fueled concerns that the nascent administration is struggling to find consensus on Capitol Hill -- even with its own Republican party -- raising questions about Trump's ability to push through promised tax cuts, deregulation and infrastructure spending. 

It led also to a warning from Fitch that it would review its US sovereign rating if the government was shut down.

Hikaru Sato, senior technical analyst at the investment strategy section of Daiwa Securities, said: "Trump's remarks are likely to keep impacting the markets for now -- at least until Congress resumes."

All three main indices in New York ended in the red.

The losses only partly fed through to Asia, where Hong Kong ended up 0.4 percent -- a third successive gain as traders returned to work after Wednesday's typhoon.

Sydney rose 0.1 percent, Singapore was 0.4-percent higher and Seoul put on 0.4 percent, while there were also gains in Taipei.

However, Tokyo eased 0.4 percent on the back of a stronger yen, while Shanghai closed down 0.5 percent.

Attention is now on the Jackson Hole symposium in Wyoming where the world's top bankers are gathering with U.S. Federal Reserve boss Janet Yellen and European Central Bank chief Mario Draghi.

With the U.S. and eurozone economies both picking up, dealers are hoping for some pointers about the future of monetary policy.

The euro has rallied in recent weeks -- hitting a near eight-year high against sterling -- with the ECB expected at some point to start winding in its massive stimulus, while another round of upbeat economic data Wednesday ramped up those expectations.

"The market is paying close attention to the planned speeches by... Yellen and... Draghi for clues and any significant remark as central banks move toward scaling back their easy monetary policies," Mizuho Bank said in a note.

"But now that minutes of the ECB's policy meeting have shown that policymakers have voiced concerns about the euro's strength, many people believe (Draghi) would avoid making significant remarks."

- Key figures around 1000 GMT -

London - FTSE 100: UP 0.4 percent at 7,409.70 points

Frankfurt - DAX 30: UP 0.3 percent at 12,213.21

Paris - CAC 40: UP 0.3 percent at 5,132.24

EURO STOXX 50: UP 0.5 percent at 3,454.22

Tokyo - Nikkei 225: DOWN 0.4 percent at 19,353.77 (close)

Hong Kong - Hang Seng: UP 0.4 percent at 27,518.60 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,271.51 (close)

New York - Dow: DOWN 0.4 percent at 21,812.09 (close)

Euro/dollar: DOWN at $1.1793 from $1.1813 at 2030 GMT

Pound/dollar: UP at $1.2817 from $1.2801

Dollar/yen: UP at 109.33 yen from 109.05 yen

Oil - Brent North Sea: DOWN 11 cents at $52.46 per barrel

Oil - West Texas Intermediate: DOWN 20 cents at $48.21