Losses in European shares offset gains in Asia on Thursday to drag down world stocks while the euro gained in part because of supportive comments from the influential head of China's national pension fund.
Investors were also eyeing meetings of the European Central Bank and the Bank of England, both of which were expected to keep interest rates unchanged.
A stronger-than-expected rise in Australian employment numbers for May and a near 50 percent surge in Chinese exports the same month ran counter to persistent fears the global economy was starting to falter amid euro zone debt woes.
This helped Asian stocks gain -- Japan's Nikkei <.N225> gained 1.1 percent -- but the boost did not carry over into Europe.
The FTSEurofirst 300 <.FTEU3> was down a third of a percent, weakened by more losses at BP <.BP.L>.
BP is under pressure from U.S. officials to forego their dividend because of the likely costs associated with the huge oil spill in the Gulf of Mexico.
The company is a heavyweight in European indexes. For example, it represented more than 8 percent of the FTSE 100 <.FTSE) in mid-April, before recent losses.
The BP share price was down 6 percent, having earlier lost more than 10 percent on the day.
BP is such a big player and is really causing jitters across Europe, said Will Hedden, sales trader at IG Index. If it has to go ahead and cut its dividend, it is really going to be seen as a bad thing.
The euro got a boost when the head of China's national pension fund said the currency would weather Europe's debt crisis.
Dai Xianglong, chairman of $114 billion China's National Social Security Fund, said the euro would gradually stabilize and that the U.S. fiscal deficit remained a big concern, tempering safe-haven demand for the dollar.
The comments helped lift the euro back above $1.20. There have been some concerns on currency markets that the debt crisis will persuade central banks, including China's, to cut back on their euro reserves.
Dai is a former governor of China's central bank.
The euro was up 0.2 percent against the dollar at $1.2011. It has risen about 1.5 percent since hitting a four-year low of $1.1876 on trading platform EBS on Monday.
Euro zone bond yields were flat to slightly higher.
(Additional reporting by Joanne Frearson)
(Editing by Jason Webb)