Markets Diverge after Trump Fires Comey

World stock markets diverged and the dollar wobbled on Wednesday, as investors digested the overnight news that U.S. President Donald Trump has fired FBI director James Comey.

In afternoon trade in Europe, stock prices were flat in Paris, while markets in London and Frankfurt edged higher.

On the other side of the Atlantic, prices on Wall Street were mixed, but the U.S. dollar remained under pressure, having tumbled to a six-month euro low after Trump ousted Comey late on Tuesday.

Asian stock markets mostly rose as South Korea's new president Moon Jae-In was sworn in, one day after his landslide election victory.

"Global indices are mixed... with European equities around breakeven, following U.S. President Trump’s surprise dismissal of FBI director Comey overnight," said Accendo Markets analyst Henry Croft.

Republican Trump on Tuesday ousted the man who headed a wide-ranging investigation into whether his aides colluded with Russia to sway last year's U.S. election.

"The latest surfacing of the unpredictable side of Trump adds further weight to renewed investor confidence in European stocks," Croft said. 

 - Watergate comparison -

In a shock move that drew comparisons to the Watergate scandal that brought down Richard Nixon, Trump told Comey the FBI needed new leadership and he was being "terminated" with immediate effect.

"The dollar sold off on the news and stocks are softer this morning, but broadly speaking I do not think this really changes much -- not unless it's the start of a Watergate-like scandal," said ETX Capital analyst Neil Wilson.

"Solid corporate earnings... ought to underpin continued equity strength for time being. I don't think this (sacking) will wake investors from their slumber yet."

Trump cited Comey's mishandling of the probe into Hillary Clinton's emails, which the Democrat has blamed for trashing her chances of becoming president.

However, London Capital Group analyst Ipek Ozkardeskaya argued that some investors were taking a "pragmatic" approach to the Comey news -- which could breathe new life into Trump's pro-business policies, like tax cuts.

"The abrupt dismissal has been a shock for many, for whom news has been perceived as tragic for the U.S. democracy," Ozkardeskaya told AFP.

"But the markets have no hard feelings and they are way more pragmatic," she added.

- Moon sweeps to power -

Elsewhere, South Korea's won currency advanced as Moon's election win helped investors look past fresh warnings of a nuclear test from the North. Moon also declared his willingness to visit Pyongyang.

Moon swept to power on Monday after his predecessor Park Geun-Hye was impeached over a corruption scandal.

The U.S. dollar, which has surged this week on expectations the Federal Reserve will lift U.S. interest rates next month, struggled to bounce back Wednesday due to North Korea jitters -- and news of Comey's firing.

"The sacking of the FBI director highlights Trump's unpredictable policy but the impact on the dollar was muted as several Fed officials rubber stamped market expectations of a June Fed tightening," noted NFS Macro analyst Nick Stamenkovic.

- Key figures around 1345 GMT - 

New York - Dow: DOWN 0.2 percent at 20,925.45  points

London - FTSE 100: UP 0.5 percent at 7,376.60

Frankfurt - DAX 30: UP 0.1 percent at 12,761.24

Paris - CAC 40: DOWN 0.1 percent at 5,394.04

EURO STOXX 50: DOWN  0.2 percent at 3,643.15

Tokyo - Nikkei 225: UP 0.3 percent at 19,900.09 (close)

Hong Kong - Hang Seng: UP 0.5 percent at 25,015.42 (close)

Shanghai - Composite: DOWN 0.9 percent at 3,052.79 (close)

Euro/dollar: DOWN at $1.0864 from $1.0871

Pound/dollar: DOWN at $1.2929 from $1.2948

Dollar/yen: DOWN at 113.89 yen from 113.94 yen

Oil - Brent North Sea: UP 64 cents at $49.37 per barrel

Oil - West Texas Intermediate: UP 68 cents at $46.56