London (AFP) - European equities rose further Tuesday, while oil prices held onto Monday's surge after top OPEC+ producers announced shock output cuts.
London stocks nudged higher in late morning deals, while Frankfurt and Paris advanced in midday eurozone trade.
The pound hit a ten-month dollar high on recent strong UK data and expectations that the Bank of England will continue to hike interest rates.
Yet equity traders remain anxious that spiking oil prices will stoke already sky-high consumer prices and spark more global monetary tightening.
Oil had spiked more than six percent Monday and equity markets mostly rose after several top OPEC+ producers led by Saudi Arabia sprang surprise output cuts to shore up prices.
The news gave a fresh headache for central bankers as they battle rampant inflation.
"The move...is particularly unhelpful for central banks who, while being worried about sticky inflation, are becoming increasingly concerned about pushing rates up from their current levels," said CMC Markets analyst Michael Hewson.
"These concerns are especially pertinent given recent worries about financial stability."
Investors also digested data indicating a slowing US economy that could potentially allow the Federal Reserve to ease back on its rate hikes.
New York's S&P 500 and Dow advanced Monday after a closely watched gauge of US factory activity from the Institute for Supply Management (ISM) missed forecasts and showed a fifth consecutive month of contraction.
Analysts said the figures suggested the world's top economy was showing signs of slowing down and could give the Fed room to ease up on its rate hiking cycle.
Eyes are now on US jobs data due Friday which will provide the latest snapshot of the economy and the effects of monetary tightening.
Last month's turmoil in the banking sector had increased bets that monetary policymakers would pause their tightening early, while news Friday that US inflation -- as judged by the Fed's favoured measure -- eased further in February had given dealers an extra spring.
However, OPEC's shock weekend announcement of a production cut of more than a million barrels a day sent inflation fears soaring once again.
Key figures around 1030 GMT
London - FTSE 100: UP 0.1 percent at 7,680.52 points
Paris - CAC 40: UP 0.7 percent at 7,393.35
Frankfurt - DAX: UP 0.9 percent at 15,720.34
EURO STOXX 50: UP 0.8 percent at 4,344.36
Tokyo - Nikkei 225: UP 0.4 percent at 28,287.42 (close)
Hong Kong - Hang Seng Index: DOWN 0.7 percent at 20,274.59 (close)
Shanghai - Composite: UP 0.5 percent at 3,312.56 (close)
New York - Dow: UP 1.0 percent at 33,601.15 (close)
Euro/dollar: UP at $1.0930 from $1.0899 on Monday
Pound/dollar: UP at $1.2504 from $1.2414
Euro/pound: DOWN at 87.42 pence at 87.80 pence
Dollar/yen: UP at 132.96 yen from 132.46 yen
Brent North Sea crude: UP 0.9 percent at $85.69 per barrel
West Texas Intermediate: UP 0.9 percent at $81.15
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