Sawt Falasteen - Stocks mixed before Fed decision, China-US trade talks

Chinese indices closed higher thanks to Beijing's fresh measures to kickstart China's struggling economy, helping offset the fallout from US tariffs.

Over in Europe, London, Paris and Frankfurt dropped in midday trading.

Against a backdrop of India and Pakistan exchanging heavy artillery fire along the contested border, Karachi's stock index sank more than six percent at the open before recovering to a loss of three percent. India's Sensex was flat.

"The main highlight today will be the Fed's latest policy decision," noted Deutsche Bank managing director Jim Reid.

The Federal Reserve is expected to again hold interest rates steady on Wednesday, in its first policy decision since US President Donald Trump in April unveiled sweeping tariffs on trading partners.

Traders will be "watching out for commentary from (Fed chief Jerome) Powell over the direction of travel for rates in the face of economic uncertainty," said Joshua Mahony, chief market analyst at Scope Markets.

In Asia, there was optimism following news that top representatives from China and the US will on the weekend hold their first negotiations since Trump's tariffs shook global markets.

Hong Kong edged up 0.1 percent and Shanghai rose 0.8 percent Wednesday, bolstered also by Beijing's decision to lower a key interest rate and the amount of cash banks need to hold in reserves.

Tokyo fell after it reopened from a public holiday in Japan.

China said that the upcoming talks on tariffs in Switzerland were being held at the United States' request, and vowed to defend "justice" and stand by its principles.

Trump has imposed tariffs totalling 145 percent on goods from China, while Beijing retaliated with 125 percent levies on US imports to China.

The talks bring "hopes there can be some de-escalation in the tit-for-tat tariffs between the two major economies," said AJ Bell investment director Russ Mould.

- India-Pakistan reaction -

Amid India's clashes with neighbour Pakistan, the Indian rupee weakened around 0.5 percent against the dollar, while the Pakistani rupee, traditionally extremely stable against the greenback, fell 0.1 percent.

"Unlike routine sabre-rattling along the border -- which markets usually shrug off -- this escalation involves actual high-intensity military engagement, triggering a flight to safety," independent analyst Stephen Innes told AFP.

"Regional investors are de-risking fast, dumping local currencies in favour of havens like the US dollar, euro and yen."

New Delhi launched missile strikes on Pakistan, marking a major escalation between the nuclear-armed neighbours after a deadly attack on the Indian-run side of Kashmir, which India blames on Pakistan.

Back in Europe, pharmaceutical stocks struggled after losses in the United States the previous day.

This followed the appointment of oncologist Vinay Prasad to a top post at the US Food and Drug Administration.

Prasad has been an outspoken critic of the agency's prior approach to Covid-19 vaccines and other key decisions.

In London, drugmakers GSK and AstraZeneca saw their shares drop by four percent and two percent respectively while Sanofi's shares slid more than three percent in Paris.

Elsewhere, weight-loss drugmaker Novo Nordisk cut its annual sales forecasts on Wednesday, citing a decline in its US market share owing to competition from copycat drugs.

But shares in the Danish company jumped around five percent in Copenhagen as it posted higher net profit and sales for the first quarter.

- Key figures at around 1045 GMT -

London - FTSE 100: DOWN 0.3 percent at 8,571.96 points

Paris - CAC 40: DOWN 0.6 percent at 7,651.17

Frankfurt - DAX: DOWN 0.1 percent at 23,226.92

Tokyo - Nikkei 225: DOWN 0.1 percent at 36,779.66 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 22,691.88 (close)

Shanghai - Composite: UP 0.8 percent at 3,342.67 (close)

New York - Dow: DOWN 1.0 percent at 40,829.00 (close)

Euro/dollar: DOWN at $1.1368 from $1.1373 on Tuesday

Pound/dollar: DOWN at $1.3350 from $1.3370

Dollar/yen: UP at 143.25 yen from 142.44 yen

Euro/pound: UP at 85.16 pence from 85.04 pence

Brent North Sea Crude: UP 0.4 percent at $62.38 per barrel

West Texas Intermediate: UP 0.6 percent at $59.42 per barrel

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I.Matar--SF-PST