European stocks waver as investors tread carefully

LONDON: European stock markets wavered on Friday 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 tight 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 as recently as September 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.

- 'Ice water' -

==========

"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 percent 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 percent and Paris flatlined in early afternoon deals.

In Asia, Shanghai shed 1.2 percent, Tokyo ended down 0.2 percent and Seoul shed 0.5 percent.

But Hong Kong added 0.2 percent after suffering five straight days of decline, while Sydney, Mumbai and Singapore also edged up.

There was little reaction to soothing comments from Xi Jinping on trade, a pledge to remove subsidies for Chinese firms and not keep the yuan artificially low.

Top Chinese and US negotiators resume negotiations next week in Beijing aimed at ending their long-running trade war.

- Key figures around 1015 GMT -

=======================

London - FTSE 100: DOWN 0.2 percent at 7,416.84 points

Frankfurt - DAX 30: UP 0.1 percent at 12,292.73

Paris - CAC 40: FLAT at 5,558.27

EURO STOXX 50: FLAT at 3,490.99

Tokyo - Nikkei 225: DOWN 0.2 percent at 22,258.73 (close)

Hong Kong - Hang Seng: UP 0.2 percent at 29,605.01 (close)

Shanghai - Composite: DOWN 1.2 percent at 3,086.40 (close)

New York - Dow: DOWN 0.5 percent at 26,495.56 (close)

Euro/dollar: UP at $1.1142 from $1.1132 at 2100 GMT Thursday

Pound/dollar: UP at $1.2907 from $1.2899

Dollar/yen: UP at 111.66 from 111.63

Oil - Brent Crude: DOWN $1.55 at $72.80 per barrel

Oil - West Texas Intermediate: DOWN 83 cents at $64.38