Investors in Britain are awaiting a UK budget update from the government

London (AFP) - European stock markets mostly rose on Tuesday, as the global spotlight was on American inflation figures due later and investors in London awaited a UK budget update.

Earlier, Asian markets mostly closed higher, but investors moved cautiously as a recent global rally lost steam as trade tensions returned.

A strong US jobs report on Friday and President Donald Trump’s decision to meet North Korean leader Kim Jong Un helped fuel a surge in global equities at the end of last week, overshadowing immediate concerns about a trade war.

But worries about Trump’s move over tariffs returned as the “America first” administration singled out Europe in a rapidly escalating war of words.

European Trade Commissioner Cecilia Malmstroem on Monday hit back by saying that the EU would “stand up to bullies”.

On Wall Street on Monday, the Dow and S&P 500 stocks indices each fell, though the Nasdaq ticked up to another record high.

Attention is now on the US inflation release later Tuesday, which will be pored over for an idea about the Federal Reserve’s timetable for hiking interest rates.

Ahead of that in Europe, the UK government will update its budget plans by publishing its latest forecasts for British growth and inflation against a backdrop of Brexit uncertainty.

“A little apprehension about the UK Spring budget statement has held back the FTSE 100” on Tuesday, said Jasper Lawler, head of research at London Capital Group.

- ‘Spotlight’ on US inflation -

In the US, a strong inflation reading could hit markets worried about the impact of higher borrowing costs.

“Equity investors are finding it difficult to ignore the gnawing concerns about trade wars and are adopting a defence first strategy despite the (positive) jobs number,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

“Keep in mind the spotlight will be on US (consumer inflation) tonight, and it was only one month ago a surprise inflation print sent the market into a tailspin, so likely some caution ahead of the critical US inflation data. Overall investors remain very cautious as sentiment recovers.”

The yen has risen on concerns about Japan's Prime Minister Shinzo Abe and his Finance Minister Taro Aso, who have been embroiled in a land deal scandal

Asian markets swung in and out of positive territory through morning deals Tuesday and by the end Tokyo was up 0.7 percent.

Hong Kong ended marginally higher while Shanghai finished 0.5 percent lower.

- Key figures around 1015 GMT -

London - FTSE 100: FLAT at 7,215.49 points

Frankfurt - DAX 30: UP 0.2 percent at 12,441.8

Paris - CAC 40: UP 0.4 percent at 5,299.26

EURO STOXX 50: UP 0.3 percent at 3,440.63

Tokyo - Nikkei 225: DOWN 0.7 percent at 21,968.10 (close)

Hong Kong - Hang Seng: FLAT at 31,601.45 (close)

New York - Dow: DOWN 0.6 percent at 25,178.61 (close)

Euro/dollar: DOWN at $1.2330 from $1.2335 at 2040 GMT

Pound/dollar: DOWN at $1.3895 from $1.3905

Dollar/yen: UP at 107.18 yen from 106.40 yen

Oil - Brent North Sea: UP 11 cents at $65.06 per barrel

Oil - West Texas Intermediate: UP 17 cents at $61.53