LONDON: Eurozone stock markets ran out of steam Tuesday before key interest rate decisions this week, although UK shares were buoyed by upbeat labour market data.

In early afternoon deals, both Frankfurt and Paris stocks flatlined, reversing earlier gains, but London pushed 0.4 percent higher approaching midday.

World oil prices retreated on fears over the effect on demand of the surge in new coronavirus infections, after rebounding sharply last week.

Central bank policymakers are battling soaring inflation that has largely been fuelled by runaway energy costs.

At the same time, however, many investors fear that the Omicron variant could throw the global recovery into jeopardy.

"Investors should expect stock markets to be volatile in remaining days of the week as central banks of massive economies like the United States, Europe, and England are expected to communicate their monetary policies," said AvaTrade analyst Naeem Aslam.

The US Federal Reserve is scheduled to announce its latest interest-rate decision on Wednesday, and could deliver a strong signal for rate hikes in 2022.

That will be followed by both the European Central Bank (ECB) and the Bank of England on Thursday.

Elsewhere Tuesday, Asian shares fell as investors eyed the Omicron coronavirus variant and woes in the Chinese property market.

After last week's strong performance, stocks have stumbled this week as Britain became the latest country to boost its response to the Omicron strain and China reported its first case -- which many fear could throw the global recovery into jeopardy.

Travel stocks push European shares lower

Tracking those fears, Tokyo declined, as did Seoul and Sydney.

Hong Kong and Shanghai both closed with losses, dragged down by continued woes in the Chinese housing market sparked by the spectacular fall from grace of property giant Evergrande.

Developer Shimao became the latest firm to be pulled into the dragnet Tuesday as its share price plunged to its lowest level in a decade.

And Monday's decision by Chinese start-up SenseTime to postpone a $767 million initial public offering in Hong Kong also spooked markets, highlighting the risks investors face from competing sanctions as relations between Washington and Beijing sour.

Coronavirus fears have continued to plague investors, with the Asian Development Bank (ADB) warning that the Omicron variant could have a "substantial" economic impact as it trimmed its 2021 and 2022 growth forecasts for developing Asia.

Key figures around 1130 GMT

London - FTSE 100: UP 0.4 percent at 7,262.62 points

Frankfurt - DAX: FLAT at 15,617.68

Paris - CAC 40: FLAT at 6,944.12

EURO STOXX 50: UP 0.1 percent at 4,185.10

Tokyo - Nikkei 225: DOWN 0.7 percent at 28,432.64 (close)

Hong Kong - Hang Seng Index: DOWN 1.3 percent at 23,635.95 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,661.53 (close)

New York - Dow: DOWN 0.9 percent at 35,650.95 (close)

Euro/dollar: UP at $1.1303 from $1.1284 Monday

Pound/dollar: UP at $1.3222 from $1.3217

Euro/pound: DOWN at 85.48 pence from 85.38 pence

Dollar/yen: UP at 113.56 from 113.54 yen

Brent North Sea crude: DOWN 0.3 percent at $74.17 per barrel

West Texas Intermediate: DOWN 0.3 percent at $71.07