European stocks mostly rose on Thursday but London fell before an expected interest rate hike from the Bank of England, while traders tracked Chinese military drills around Taiwan.
Oil prices edged higher, one day after sinking as major producers announced a small output increase.
The London stock market declined ahead of the Bank of England's latest rate decision at 1100 GMT.
The BoE is tipped by economists to ramp up interest rates by a half-point, the biggest hike in almost 30 years, mirroring aggressive monetary policy elsewhere as it seeks to cool decades-high inflation.
"All eyes (are) on (the) BoE to see if follows other central banks and delivers a larger hike," said MUFG analyst Lee Hardman.
Rising interest rates tend to weigh on shares because they lift business loan repayments and eat further into consumers' incomes.
In company news, Rolls-Royce shares sank 10 per cent after the British engine maker revealed it tanked into a £1.6 billion (€1.9 billion) net loss in the first half on adverse currency movements, despite rebounding revenues.
Frankfurt and Paris stock markets meanwhile advanced.
Most Asian indices tracked a Wall Street rally fuelled by healthy economic and earnings data, despite lingering Taiwan concerns.
New York surged on Wednesday after a report on the crucial US services sector showed surprise improvement, soothing recession fears in the world's top economy.
The crucial US services sector showed surprise improvement, soothing recession fears in the world's top economy
That came as several companies – including Electronic Arts, Starbucks and Moderna – posted strong earnings, extending a broadly positive reporting season in the face of surging inflation and rising interest rates.
Markets have swung this week after a number of Federal Reserve officials lined up to suggest there were still some big US rate hikes likely and talk of cuts next year might be overdone.
Pelosi visit
The mood in Asia was also a lot more settled after the upheaval of this week's visit to Taiwan by US House Speaker Nancy Pelosi, which sparked outrage in China with warnings of stern military and economic responses.
Beijing has suspended a limited amount of cross-strait imports and exports, and on Thursday began its largest-ever military exercises encircling Taiwan that are expected to last for days.
Soon after, Taiwan's defence ministry said it was "preparing for war without seeking war".
Taipei stocks fell again on worries that the Chinese manoeuvres would hit shipping lanes and flights into Taiwan.