Sawt Falasteen - European stocks fall with eyes on earnings, US Fed

Both main oil contracts jumped around three percent following a Wall Street Journal report that the US was preparing for a prolonged blockade of Iranian ports.

Analysts warned that such a move would prompt Iran to maintain its own blockade of the Strait of Hormuz, leaving the vital oil shipping route at a near standstill.

The US Federal Reserve is widely expected to keep interest rates unchanged later in the day, with markets closely watching its guidance on inflation as energy costs soar.

"The longer the conflict persists and the Strait of Hormuz remains disrupted, the more pronounced the inflationary pressures are likely to become," said Anna Macdonald, investment strategy director at Hargreaves Lansdown.

International oil benchmark Brent crude rose to around $114 a barrel in midday trading in London. The dollar was little changed against its peers.

"The market is increasingly shifting towards a view that no longer expects a quick and lasting peace, nor an immediate reopening of the Strait of Hormuz," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management.

With talks to end the Middle East war appearing to be at a standstill, investors' attention turned to earnings updates.

Stock markets in London, Paris and Frankfurt were all lower in midday trading, despite some major companies spiked on strong earnings reports.

Shares in Swiss banking giant UBS jumped almost five percent as its net profit rose 80 percent in the first quarter, beating expectations.

Strong quarterly profit growth led shares in German sportswear giant Adidas seven percent higher in Frankfurt.

Attention will also be on earnings from Wall Street titans Amazon, Google, Meta and Microsoft to assess the outlook for artificial intelligence spending and growth.

"Given the outsized weighting of these companies in the index, and the enormous capital expenditure they have announced to build AI capabilities, these results will be closely watched by investors," Macdonald added.

Tech stocks took a hit on Tuesday following a report in the Wall Street Journal that ChatGPT-maker OpenAI had missed targets on the number of users and revenue.

After a weak lead from Wall Street, Asian stock markets mostly rose Wednesday, with Hong Kong up more than one percent.

Shanghai also advanced, while Tokyo was closed for a holiday.

The Bank of Japan left interest rates unchanged on Tuesday, with the European Central Bank and the Bank of England expected to follow suit on Thursday.

Japan's central bank also sharply hiked its inflation forecasts for the current year and halved its growth projections after the Iran war sent oil prices soaring.

- Key figures at 1100 GMT -

West Texas Intermediate: UP 3.3 percent at $103.82 a barrel

Brent North Sea Crude: UP 2.8 percent at $114.33 a barrel

London - FTSE 100: DOWN 0.8 percent at 10,251.46 points

Paris - CAC 40: DOWN 0.6 percent at 8,055.98

Frankfurt - DAX: DOWN 0.2 percent at 23,983.43

Hong Kong - Hang Seng Index: UP 1.7 percent at 26,111.84 (close)

Shanghai - Composite: UP 0.7 percent at 4,107.51 (close)

Tokyo - Nikkei 225: Closed for a holiday

New York - Dow: UP 0.1 percent at 49,141.93 (close)

Euro/dollar: DOWN at $1.1708 from $1.1712 on Tuesday

Pound/dollar: DOWN at $1.3513 from $1.3515

Dollar/yen: UP at 159.77 yen from 159.64 yen

Euro/pound: UP at 86.66 pence from 86.64 pence

U.Shaheen--SF-PST