Portugal Colonial - European stocks back in black, but euro under pressure

Meanwhile, the euro came under pressure after a key survey suggested the single-currency area could be on the verge of recession due to slumping demand and rising costs.

A bigger-than-expected hike in interest rates by the European Central Bank failed to provide a lasting boost to the euro, as political turmoil in Italy also clouds the outlook.

Economic activity in the eurozone plummeted in July, the closely watched purchasing managers' index, or PMI, showed, with a big drop in manufacturing and consumers' post-lockdown spending sprees braked by high prices.

The barometer fell from 52.0 in June to 49.4, below the 50-point level that indicates growth and the lowest level in 17 months.

The data "point to a fall in gross domestic product of 0.5 percent to 1.0 percent at the start of the third quarter, supporting our view that the eurozone economy is headed for a technical recession come the fourth quarter," said Melanie Debono, economist at Pantheon Macroeconomics.

Andrew Kenningham, economist at Capital Economics, agreed.

"The eurozone is teetering on the brink of recession. The ECB will have to follow up on yesterday's historic rate hike with several more in the coming months even though this will worsen the downturn," he said.

Nevertheless, Paris' CAC 40 index rose 0.3 percent and the DAX in Frankfurt edged higher. London's FTSE 100 also managed a tiny gain.

It has been a rollercoaster week as investors try to gauge the outlook -- corporate earnings have so far been relatively positive, but mixed economic data and geopolitical events are clouding sentiment.

Results by Snap, the owner of the Snapchat messaging app, landed like a bombshell, however, with quarterly losses nearly tripling to $422 million despite revenue increasing 13 percent under conditions "more challenging" than expected.

Its shares plummeted nearly 38 percent.

"Snap is getting bludgeoned," said market analyst Patrick J. O'Hare at Briefing.com.

Michael Hewson at CMC Markets said: "Snap has acted as the canary in the coal mine before when it comes to being a leading indicator for what might be coming as far as slowdowns in advertising sales."

The fact that Snap's revenues fell short due to weaker advertising sales "bodes ill for Alphabet and Meta Platforms next week" when they release their second quarter earnings. Alphabet owns Google while Meta is the parent company of Facebook.

Wall Street's tech-heavy Nasdaq Composite index slumped 1.4 percent in late morning trading, while the S&P 500 shed 0.6 percent and the Dow dipped 0.1 percent.

The US PMI coming in at 47.5 -- the first time in contraction territory in over two years -- dampened sentiment.

"US stocks are under pressure as recession fears run wild as business activity contracts and the labor market shows signs of weakness," said Edward Moya at OANDA.

Chris Beauchamp, chief market analyst at online trading platform IG, said this week's rebound in equities had lasted longer than previous ones but was on borrowed time.

Investors "will be wary of pushing their luck too hard into next week, given the avalanche of earnings heading their way, plus a (US Federal Reserve interest rate) decision and the first reading on US second quarter GDP that might easily provide fresh recession worries."

Earlier in Asia, markets had started brightly but lost some of their lustre as the day wore on.

- Key figures at around 1530 GMT -

New York - Dow: DOWN 0.1 percent at 31,998.41 points

EUROSTOXX 50: FLAT at 3,596.49

London - FTSE 100: UP less than 0.1 percent at 7,276.37 (close)

Frankfurt - DAX: UP less than 0.1 percent at 13,253.68 (close)

Paris CAC 40: UP 0.3 percent at 6,216.82 (close)

Tokyo - Nikkei 225: UP 0.4 percent at 27,914.66 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 20,609.14 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,269.97 (close)

Euro/dollar: DOWN at $1.0221 from $1.0232 on Thursday

Pound/dollar: UP at $1.2027 from $1.2002

Euro/pound: DOWN at 84.98 pence from 85.22 pence

Dollar/yen: DOWN at 136.12 yen from 137.34 yen

West Texas Intermediate: UP 1.0 percent at $97.35 per barrel

Brent North Sea crude: UP 1.2 percent at $105.12 per barrel

burs-rl/cdw

A.S.Diogo--PC