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European shares shrug off IMF warnings

Deutsche Boerse said investors holding 89 percent of its capital had agreed to the firm's planned merger with the London Stock Exchange deal by August 12

Europe's main stock markets mostly rose on Tuesday, taking in their stride warnings by the IMF that the global economy faces weak growth and possibly severe damage should Britain quit the European Union.

In Paris the CAC 40 rose 0.3 percent and the DAX 30 in Frankfurt added 0.2 percent in afternoon trading, taking a lead from gains across most of Asia.

But London's FTSE 100 had slipped 0.05 percent.

The International Monetary Fund cut its global growth forecast for the third straight quarter, lowering it by 0.2 percentage points from its January outlook to a sluggish 3.2 percent expansion for this year.

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It said economic activity has been "too slow for too long," and called for immediate action by the world's economic powers to shore up growth.

The IMF said it was concerned over "fraying" unity in the European Union under pressure from the migration crisis and the "Brexit" possibility.

It said the eurozone should grow a modest 1.5 percent this year, down from the 1.7 percent it estimated in January, and slower than the 1.6 percent seen in 2015.

However the IMF raised its 2016 growth forecast for China, the world's second-largest economy by 0.2 percentage points to 6.5 percent, citing stimulus plans announced by the government.

Concerns about a sharp slowdown in China, which had supported growth across the world in recent years, had sparked a massive selloff in equities and commodities at the beginning of 2016.

Meanwhile the EU unveiled plans to force the world's biggest multinationals to report their earnings country by country and pay fair taxes, a measure not welcomed by businesses.

- Glum earnings expectations -

Wall Street stocks opened little changed Tuesday as the market prepared for a trove of earnings from big US banks, with the Dow Jones Industrial Average rising 0.1 percent.

Alcoa got the earnings season off to a downcast open after the market close Monday, reporting a steep drop in first-quarter earnings on tumbling aluminium prices and announcing plans to cut as many as 2,000 jobs.

Prices of industrial commodities have been in retreat owing largely to slowing demand from China.

"Concerning the US earnings season, expectations have come down substantially over the past weeks and months mainly due to slowing global growth with little change expected in the months ahead," said Markus Huber, a trader at City of London Markets.

"Because of this many are worried that sooner or later weak corporate profits will drag stocks down too as many studies are pointing out that in the long-term share prices will follow earnings."

World markets have been unable to maintain their momentum after the bright run seen in March, with concern growing that central banks may be running out of tools to kick-start growth and inflation.

The euro slid against the dollar while a fall in the yen pushed Japan's stock market higher, leading a Asia-wide advance, although analysts warned that worries about the world economy and earnings would temper any rally.

- Key figures around 1330 GMT -

London - FTSE 100: DOWN 0.05 percent at 6,197.22 points.

Frankfurt - DAX 30: UP 0.2 percent at 9,698.30

Paris - CAC 40: UP 0.3 percent at 4,323.53

EURO STOXX 50: UP 0.04 percent at 2,925.50

New York - Dow: UP 0.1 percent at 17,575.79

New York - S&P 500: UP 0.1 percent at 2,044.08

New York - Nasdaq: DOWN 0.05 percent at 4,830.86

Tokyo - Nikkei 225: UP 1.1 percent at 15,928.79 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,023.65 (close)

Hong Kong - Hang Seng: UP 0.3 percent at 20,504.44 (close)

Euro/dollar: DOWN at $1.1387 from $1.1406 on Monday

Dollar/yen: UP at 108.35 yen from 107.94 yen