Stock markets wobble on N.Korea jitters

London - Global stock markets wobbled on Wednesday on investor jitters over North Korea's latest sabre-rattling.

London, Frankfurt and Paris managed tiny gains mid-afternoon in Europe as a weaker pound and euro against the dollar supported their exporting sectors.

Wall Street also eked out small gains as investors returned from the US Independence Day holiday.

Investors "are not ignoring the bout of risk aversion triggered by North Korea's ongoing missile tests," said analyst Naeem Aslam at trading firm Think Markets.

"The geopolitical tensions remain a major threat for the global stability and economic health and traders would not ignore this fact."

Traders ran for the side-lines after Washington confirmed that Pyongyang had for the first time tested a missile capable of reaching the United States, ratcheting up pressure on the already tense Korean peninsula.

Fed watchers on alert

Investors meanwhile waited on Wednesday's publication of minutes from the US central bank's most recent meeting, ahead of key jobs data on Friday.

"The Federal Reserve will release the minutes from the June meeting and investors will get an insight into what the US central bank was thinking when it raised interest rates for the second time this year," said CMC Markets analyst David Madden.

"Since then, Janet Yellen, the chair of the Federal Reserve, announced there will be further monetary tightening, but it will be 'timely and predictable'."

The Fed last month raised its benchmark interest rate by a quarter point to 1.0 to 1.25%.

The US central bank said it expected to lift borrowing costs for a third time this year, brushing aside weaker inflation and consumption data in recent weeks.

Speculation that the minutes, to be published after the European markets' close, will point to a tightening bias propped up the dollar against rival currencies.

'What reaction'?

Earlier on Wednesday, Asian equity markets rebounded to sit mostly higher as early nervousness over North Korea gave way to bargain-buying.

Despite those gains, dealers remain on edge and are now awaiting the next development after Russia and China issued a joint appeal to ease tensions, while the United Nations Security Council will hold an emergency meeting later in the day.

The test came just as the US was preparing to celebrate Independence Day and days before a G20 summit in Germany, where it will probably top the agenda.

It was the latest provocation by North Korean leader Kim Jong-Un, who is determined to develop a nuclear weapons programme he says is needed to ward off invasion.

South Korea and the US on Wednesday launched a barrage of missiles simulating a precision strike against Pyongyang, in response to the provocation.

"Traders and investors may be wondering what reaction this latest missile test will get," said Greg McKenna, chief market strategist at AxiTrader.

Shares in British payment processing firm Worldpay fell nearly 10% after it agreed to merge with its US peer Vantiv.

The stock had risen 28% on Tuesday on expectations of a takeover battle for the UK company, but potential bidding rival JP Morgan Chase said on Wednesday that it would not pursue Worldpay any further, causing the shares to fall back.

The oil price slipped, which traders attributed to reports saying that Opec's production rose in June, casting doubt on an early re-balancing of the global oil market.