European stock markets wavered yesterday with investors treading carefully as global slowdown worries return to the fore, with analysts pointing to an economic divergence between the US and the rest of the world.
Oil prices fell sharply on profit-taking, one day after nearing six-month highs on supply concerns.
Markets await responses from OPEC and Russia after the US said it would not extend waivers that allow certain countries to buy crude from sanctions-hit Iran.
Stock markets traders have meanwhile been cheered by a string of better-than-expected earnings from corporate titans this reporting season, with Facebook, Microsoft and Amazon adding to the positive mood on Wall Street, but unable to fuel broad gains.
However, there have been a couple of misses from other top firms, while a series of downbeat data and central bank caution have dampened spirits.
Central banks in Japan, Sweden, Turkey and Ukraine, with an eye on the global outlook, on Thursday took a dovish turn and flagged softer policy in the near future. That came after a growth forecast cut by the Bank of Canada.
Russia's central bank opted to hold its key interest rate on Friday, indicating that inflation passed its peak last month.
Meanwhile low inflation has led to speculation the Reserve Bank of Australia could soon cut borrowing costs, while the European Central Bank is battling weak eurozone growth.
On top of that, a drop in German business confidence fanned worries about the bloc's biggest economy, while South Korea saw its worst performance in 10 years during the first quarter.
US markets have been boosted after the Federal Reserve last month hinted that it will not raise rates again this year, having signalled that it expected to raise rates three times.
The US economy meanwhile continues to outpace its peers and the jobs market is flourishing, with Wall Street hitting new records this week. Eyes are now on the release of US growth data later Friday.
“While positive earning numbers have lent massive support to US equities, it's hard to ignore the inescapable fact that we are back to the divergent economic narrative where the US economy is on fire while ice water continued to pour over the rest of the globe,” said Stephen Innes of SPI Asset Management.
In European deals on Friday, London stocks fell 0.2 per cent approaching midday, hit by news of falling first-quarter profits at British state-rescued lender Royal Bank of Scotland.
In the eurozone, Frankfurt rose 0.1 per cent and Paris flatlined in early afternoon deals.
In Asia, Shanghai shed 1.2 per cent, Tokyo ended down 0.2 per cent and Seoul shed 0.5 per cent.
But Hong Kong added 0.2 per cent after suffering five straight days of decline, while Sydney, Mumbai and Singapore also edged up.