Global stocks were nearly flat on Friday while political upheaval in Europe and uncertainty over a US-North Korea summit restrained equity markets.
Growing expectations of increased oil supply hit crude prices, lifting the US dollar and weighing on energy shares, reports Reuters.
Brent crude futures fell $2.35, or 3 per cent, to settle at $76.44 a barrel after Saudi Arabia and Russia said they were ready to ease supply curbs that have pushed prices to their highest since 2014.
US President Donald Trump on Friday signalled that a June 12 meeting with North Korean leader Kim Jong Un could still take place a day after he cancelled the planned historic summit.
That led to a dip in gold prices, but it did little to increase demand for risk assets, investors said.
Gold prices dropped slightly after Trump’s comments, but remained above $1,300 per ounce.
Wall Street ended mostly down as oil prices dragged down energy stocks ahead of a holiday weekend in the United States, which typically leads to low volume.
The Dow Jones Industrial Average fell 59.15 points, or 0.24 per cent, to 24,752.61, the S&P 500 lost 6.46 points, or 0.24 per cent, to 2,721.3 and the Nasdaq Composite added 9.43 points, or 0.13 per cent, to 7,433.85.
US Treasury yields fell to their lowest level in three weeks as concerns about Italy’s new government and a leadership change in Spain boosted appetite for low-risk investments.
Italian Prime Minister-designate Giuseppe Conte began assembling his cabinet on Thursday, with party leaders pushing for an 81-year eurosceptic economist to be given the pivotal post of economy minister. Italy’s president is opposing the appointee.
Political risk also reared its head in Spain, where a threat of no-confidence motions against Prime Minister Mariano Rajoy sent Spanish stocks and bond prices plunging.
The pan-European FTSEurofirst 300 index rose 0.05 per cent and MSCI’s gauge of stocks across the globe shed 0.29 per cent.
While yields on German and US bonds fell amid the uncertainty, there have been few signs of a wide-ranging sell-off in higher-risk assets - Wall Street’s volatility index stayed near four-month lows.
The worry about Italy kept the euro under pressure against the dollar. The dollar index rose 0.48 per cent, with the euro down 0.53 per cent to $1.1657.
The dollar has rebounded after touching two-week lows versus a basket of currencies on Thursday, helped by gains against commodity-linked currencies, as oil prices fell.
Elsewhere, worries that investors could shift assets from emerging markets to higher-yielding US bonds have been a major headwind for emerging markets this year. Turkey has been the worst hit.