Sawt Falasteen - European stocks drop, oil steadies

Investors remain on edge as central banks hike interest rates to fight runaway inflation, but which threatens to tip economies into recession.

Oil prices steadied after recent heavy falls caused by forecasts of weaker demand on slowing economic growth, while the possibility of an Iran nuclear deal that would boost supplies.

In foreign exchange, the pound firmed against the dollar as official data showed UK inflation soaring above ten percent.

That increased expectations of a further sharp rise to the Bank of England's main interest rate, according to economists.

"Markets reacted negatively to the (inflation) news with the (London) FTSE and other European indices falling," noted City Index analyst Fawad Razaqzada.

Shares in heavily-indebted cinema chain Cineworld plunged 50 percent to 10.5 pence in London after the group warned over weaker-than-expected ticket sales.

Hit hard by pandemic lockdowns in Britain and the United States, Cineworld said it was further impacted since reopenings by a "limited" number of film releases.

Traders were meanwhile awaiting minutes from the Fed's July meeting due later Wednesday for insight into the size of the US central bank's next rate hike.

"We expect the... minutes to have a hawkish tilt," said Carol Kong at Commonwealth Bank of Australia.

"We would not be surprised if the minutes show (officials) considered a 100 basis points increase in July."

The bank lifted rates by 75 points in both June and July.

While the Federal Reserve and its peers are expected to keep tightening monetary policy for the rest of the year, talk is building that they will be able to ease up in 2023 should inflation cool as expected by markets.

In Asia on Wednesday, major stock markets gained following a positive lead from Wall Street and hopes of Chinese stimulus.

China's central bank on Monday announced a surprise interest rate cut, preceding a report that said Premier Li Keqiang called on six key provinces -- accounting for about 40 percent of the economy -- to bolster pro-growth policies.

Chinese tech giant Tencent on Wednesday posted its first drop in quarterly revenue since going public, as the company grapples with China's economic downturn, pandemic disruptions and ongoing scrutiny from regulators.

- Key figures at around 1100 GMT -

London - FTSE 100: DOWN 0.4 percent at 7,503.60 points

Frankfurt - DAX: DOWN 0.9 percent at 13,779.22

Paris - CAC 40: DOWN 0.4 percent at 6,563.41

EURO STOXX 50: DOWN 0.5 percent at 3,785.27

Tokyo - Nikkei 225: UP 1.2 percent at 29,222.77 (close)

Hong Kong - Hang Seng Index: UP 0.5 percent at 19,922.45 (close)

Shanghai - Composite: UP 0.5 percent at 3,292.53 (close)

New York - Dow: UP 0.7 percent at 34,152.01 (close)

Euro/dollar: UP at $1.0173 from $1.0166 Tuesday

Pound/dollar: UP at $1.2100 from $1.2092

Euro/pound: UP at 84.10 pence from 84.04 pence

Dollar/yen: UP at 134.89 yen from 134.21 yen

West Texas Intermediate: DOWN 0.1 percent at $86.45 per barrel

Brent North Sea crude: DOWN 0.1 percent at $92.28 per barrel

H.Darwish--SF-PST