World stock markets declined Friday as traders awaited more US jobs data and the G20 summit in Germany that was taking place against the backdrop of a diplomatic standoff between North Korea and the West.

"The main focus today is the US nonfarm payroll report for June," said Neil MacKinnon, global macro strategist at VTB Capital.

"Elsewhere, the G20 Summit is likely to emphasise free trade and push back against protectionist policies," he added in a note to clients.

In Europe around 0945 GMT, London's benchmark FTSE 100 was 0.2-percent lower, also following some poorly-received UK economic data, including a drop in house prices, a dip in industrial output and widening of Britain's trade deficit.

Asian markets mostly headed into the weekend on a negative note following a sell-off on Wall Street, US jobs data coming in below par and sliding oil prices fuelling losses across the energy sector.

Increasing expectations that central banks are about to start winding down stimulus policies are weighing also on buying sentiment and dragging on the dollar.

And with traders nervous over North Korea's latest missile provocation, analysts said there is little desire to buy risky assets such as stocks.

US markets closed sharply lower Friday after payrolls firm ADP said private-sector employers added far fewer jobs last month than had been forecast.

The reading fanned concerns about the government's official figures due Friday as experts suggest another two hikes in US interest rates this year are no longer certain, stifling the greenback.

"Unless US economic data starts to improve again, the short-term outlook for the US dollar is rather negative," said AxiTrader market analyst Milan Cutkovic.

"Rate expectations have declined. The market is expecting only one more rate hike this year."

While the US is showing some signs of softening, the global outlook is improving, which has emboldened central banks to begin scaling back stimulus measures put in place during the financial crisis.

The Bank of England, Bank of Canada and European Central Bank are among those looking at tightening policies, bringing an end to the divergence that has supported the dollar for years.

Oil prices were meanwhile down more than a dollar as traders focused on news that US crude production had increased.

- Key figures around 0945 GMT -

London - FTSE 100: DOWN 0.2 percent at 7,323.50 points

Frankfurt - DAX 30: DOWN 0.2 percent at 12,363.00

Paris - CAC 40: DOWN 0.3 percent at 5,135.20

EURO STOXX 50: DOWN 0.3 percent at 3,110.60

Tokyo - Nikkei 225: DOWN 0.3 percent at 19,929.09 (close)

Hong Kong - Hang Seng: DOWN 0.5 percent at 25,340.85 (close)

Shanghai - Composite: UP 0.2 percent at 3,217.96 (close)

New York - DOW: DOWN 0.7 percent at 21,320.04 (close)

Euro/dollar: UP at $1.1422 from $1.1421 at 2045 GMT Thursday

Pound/dollar: DOWN at $1.2917 from $1.2971

Dollar/yen: UP at 113.74 yen from 113.18 yen

Oil - Brent North Sea: DOWN $1.11 at $47.00 per barrel

Oil - West Texas Intermediate: DOWN $1.16 at $44.36

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Source: AFP