Global stocks fell on Friday after a drop in euro zone inflation showed the recovery is still weak there and concern persisted over the outlook for emerging economies.
Official figures showed the inflation rate in the 18-country euro zone dropped to 0.7 percent in December from 0.9 percent the previous month. That is far below the European Central Bank's target of just under 2 percent and has raised expectations of a rate cut next week.
The "data maintain the pressure on the ECB to do more to ward off deflation risks, perhaps as soon as next week," said Jonathan Loynes, chief European economist at Capital Economics.
(Read more: US stock futures point to a sharp drop at the open)
The figures added to jitters in markets over developing economies. Many of them have seen their currencies slide sharply over the past week on concerns that growth will slow and money will flow out of their economies as the U.S. Federal Reserve tightens its monetary policy, draining on global liquidity.
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By midday in Europe, Germany's DAX was down 1.5 percent at 9,236.11 while France's CAC-40 fell 0.9 percent to 4,139.54. Britain's FTSE 100 was 0.9 percent lower at 6,482.55.
Wall Street was expected to open lower as well, with both the Dow and S&P 500 futures down 0.6 percent.
Among emerging economies, markets were also downbeat, particularly among currencies. The Turkish lira and the South African rand fell again, by 0.6 percent and 1 percent, respectively.
Earlier, in Asia, many markets were closed for the Lunar New Year holidays.
(Read more: Stocks down 4% in January! If history repeats … )
Japan's Nikkei 225, the main index still trading, reversed early gains that were sparked by reported increases in inflation and factory output. Inflation is a possible sign of economic recovery in Japan, which has been plagued by falling prices during two decades of stagnation.
But a rise in the yen against the U.S. dollar was negative for exporting stocks, dragging the Nikkei down 0.6 percent to 14,914.53. The dollar was down 0.5 percent against the yen, at 102.20 yen.
Financial markets were closed in China, Hong Kong, South Korea, Taiwan, Indonesia, Singapore, Malaysia and the Philippines.
Among stock markets not observing the holiday, India's Sensex gained less than 0.1 percent to 20,504.69 and Thailand's SET was up 0.4 percent at 1,269.19. Australia's S&P/ASX 200 added less than 0.1 percent to 5,190 and New Zealand's benchmark gained 0.5 percent to 5,258.40.
(Read more: Investors yank $10 billion from emerging market funds)
Benchmark U.S crude for March delivery was down 43 cents at $97.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 87 cents on Thursday.
In currencies, the euro was flat at $1.3558.
—By The Associated Press