Battered oil fights back, sterling hit as May's poll lead shrinks

Battered oil prices recovered some ground on Friday as investors looked past disappointment that an OPEC meeting did not produce bigger supply cuts, while sterling slid on a poll showing the ruling Conservatives' lead shrinking, two weeks before an election.

European stock markets opened down as turbulence in oil markets following Thursday's OPEC meeting, at which oil producers extended existing output cuts but did not expand them, undermined sentiment towards risk assets in general. Asian shares also fell.

Some of the sharpest moves came in currencies, where Britain's pound fell over 0.5 percent to $1.2861 and looked set for its biggest one-day slide in over three weeks and steepest one-week decline since early April.

The first poll taken since a suicide bombing killed 22 people indicated that Britain's opposition Labour Party had cut May's Conservative Party lead to five points less than a fortnight before the parliamentary election.

Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan, which closed at a two-year high on Thursday, fell 0.2 percent, shrinking its weekly gain to 1.45 percent. Japan's Nikkei closed 0.6 percent lower.

Trade in U.S. stock futures pointed to a muted start for Wall Street, where the S&P 500 and the Nasdaq closed at record highs on Thursday after strong earnings reports from retailers.