(MENAFN- AFP) Europe's stock markets edged higher on Tuesday in subdued deals, as traders eyed the prospect of more EU sanctions on Russia over the Ukraine crisis.
London's benchmark FTSE 100 index climbed 0.28 percent to stand at 6,806.92 points in late morning deals in the capital.
In Paris, the CAC 40 increased 0.11 percent to 4,349.41 points and Frankfurt's DAX 30 index added 0.10 percent to 9,607.26.
"European equity markets are subdued amidst concerns about tougher sanctions potentially to be imposed by Western policymakers on Russia," said ETX Capital analyst Daniel Sugarman.
The EU was set to approve punishing sanctions against Russia on Tuesday over its role in the Ukraine crisis and the downing of Malaysia Airlines flight MH17.
Envoys from the 28 states meeting in Brussels are expected to widen sanctions by approving sector-wide embargoes in four key areas: access to capital markets, defence, dual-use goods and sensitive technologies, including in the energy sector.
"It appears that world leaders have been busy on the diplomatic back channels and managed to agree on tough financial, energy and military action in unison with the US," added Capital Spreads dealer Jonathan Sudaria.
"Like the prior tit-for-tat exchange of token sanctions between the West and Russia, traders are concerned about how Russia will react and what they deem will be appropriate retaliatory action."
- BP shares hit reverse -
In London, energy major BP saw its share price slide after warning that more sanctions on Russia could "adversely impact" its performance.
The group added however that it had been unaffected so far by US sanctions imposed on Russia, reporting a two-thirds boost to second-quarter net profits from the equivalent figure last year.
BP shares had risen earlier after the company revealed that net profits soared 65 percent to $3.369 billion (2.508 billion euros) in the second quarter, boosted by its stake in Russian state oil giant Rosneft.
"BP shares initially rose (following the results), but plunged soon afterwards amidst indications of preparations by the EU to increase sanctions on Russia, as well as fears regarding (President) Vladimir Putin's response," added Sugarman.
BP owns almost 20 percent of Rosneft following a 2012 deal in which it sold the Russian state oil firm its 50-percent stake in joint venture TNK-BP.
British engineering firm GKN topped the London FTSE risers board, jumping 6.70 percent to 366.1 pence after it posted surging first-half profits and hiked its shareholder dividend.
In Paris, shares in auto maker Renault fell by 3.24 percent to 67.25 euros on disappointing results notably because of poor cash flow.
Shares in car-parts group Faurecia, a subsidiary of PSA Peugeot Citroen, rose 2.92 percent to 28.41 euros after the company upgraded its outlook.
Stock in computer consultancy Atos surged 3.0 percent to 59.35 euros on strong orders in the second quarter as the company ties up a friendly takeover of Bull computers.
Shares in video games company Gameloft plunged 20.39 percent to 4.53 euros on the secondary SBF market on a disappointing outlook for the year.
- Asian markets push higher -
Asian equities extended their gains after a mixed lead from Wall Street as investors awaited the release of key US data later in the week.
Hong Kong was up 0.87 percent, Shanghai gained 0.24 percent, Tokyo rose 0.57 percent, Sydney ended 0.20 percent higher and Seoul added 0.64 percent.
Investors are now awaiting the release of key US data, including on second-quarter growth and jobs creation, which will give a better idea about the state of the economy.
On Wednesday the Federal Reserve will hold its latest board meeting, with bank head Janet Yellen facing calls to embark on a tighter monetary policy to quell what some analysts warn are overheated asset markets and bubbles in some sectors.
In foreign exchange activity on Tuesday, the European single currency firmed to $1.3442 from $1.3438.
The euro rose to 79.20 British pence from 79.12 on Monday. The pound decreased to $1.6970 from $1.6983.
The price of gold advanced to $1,308.18 an ounce on the London Bullion Market from $1,304.50 on Monday.
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