World stocks are poised to end May up nearly 2 percent, marking the seventh straight monthly increase and the longest monthly winning streak in over a decade.
MSCI's global equity index .MIWD00000PUS held steady on Wednesday, while European stocks edged down 0.1 percent in early trade .FTEU3 following Wall Street's dip on Tuesday .SPX .DJI.
Asian shares drew some support from data that showed activity in China's manufacturing sector grew at the same pace in May as in April, although a sturdy performance from the Japanese yen helped push the Nikkei into the red .
The biggest mover in currencies was sterling, which shed 0.3 percent after a YouGov poll showed the ruling Conservative Party might lose 20 of the 330 seats it holds while the opposition Labour Party could gain nearly 30 seats.
"The return of U.S. and UK markets yesterday (after holidays) saw a little bit of weakness creep in as we head into month end and what has been a positive month for markets, with records broken on an almost daily basis," said Michael Hewson, chief markets analyst at CMC Markets.
"This soft tone looks set to be carried over this morning," he said.
The main pan-European indexes were slightly lower early on Wednesday, Germany's DAX .GDAXI was flat and sterling's weakness helped lift Britain's FTSE 100 .FTSE by 0.2 percent.
U.S. futures pointed to a rise of 0.1 percent on Wall Street ESc1 DJc1.
Month Of May
Activity in China's manufacturing sector grew at the same pace in May as in April, with a headline reading of 51.2, official data showed, in a reassuring sign the world's second-biggest economy is not losing too much steam after a solid first quarter performance.
Analysts had seen a slight slowing to 51.0.
European markets could take their cue later in the day from euro zone inflation data, which are expected to show a sharp slowdown to 1.5 percent in May from 1.9 percent April.
If confirmed, the European Central Bank may be less inclined to signal the start of the process of withdrawing its huge policy stimulus at its meeting next week, analysts said.
The euro was holding steady just under $1.12 EUR=, while 10-year German bond yields were up a basis point at 0.305 percent.
The dollar was steady against the yen at 110.85 yen JPY=, and the 10-year U.S. Treasury yield was up a basis point at 2.227 percent US10YT=RR. Two weeks ago it was at 2.41 percent.
Sterling fell as low as $1.2791 GBP=D4, near a one-month low of $1.2775 touched on Friday before recovering some ground to $1.2810. It also slipped to 0.8738 pound per euro EURGBP=D4, near Friday's eight-week low of 0.8750.
New constituency-by-constituency modeling by YouGov showed the ruling Conservative Party might lose 20 seats at the June 8 election while Labour could gain nearly 30 seats, potentially leading to a hung parliament, The Times said.
The news came after a string of opinion polls showed a narrowing lead for prime minister Theresa May's Conservatives, shaking investors' confidence that she would easily win a majority and strengthen her hand in the Brexit negotiations.
"We're getting very negative on sterling again," said George Saravelos, FX strategist at Deutsche Bank.
"If May is unable to deliver a substantially increased majority, her flexibility to negotiate will not have improved. A strong Conservative majority is also only a necessary, not sufficient condition for a smooth Brexit," he said.
In commodities, oil prices remained soft, as concerns lingered about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices.
U.S. crude futures CLc1 fell 0.9 percent to $49.21 a barrel. Global benchmark Brent LCOc1 was down 0.8 percent at $51.44 per barrel.
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