LONDON – European shares opened higher on Thursday, though market participants were still cautious after Asian equities fell for a fourth consecutive day, and as focus turns to key US data due later in the session.

Hong Kong's Hang Seng Index led the declines in Asia, dropping to its lowest level so far this year. Chinese mainland shares also fell.

Global stock markets have struggled to make gains so far this week, hurt by worries about the global economic recovery.

The MSCI world equity index has fallen around 1.7 percent since it reached an all-time high on Sept 7. At 0722 GMT on Thursday it had inched down less than 0.1 percent.

Europe's STOXX 600 was up 0.7 percent on the day, having fallen 0.8 percent the previous day.

"We have an unusual situation where the overall market is sideways to lower but with a risk-on trend underneath and that's down to signs the Delta variant may be peaking in the US, which is driving people into reflation and recovery plays," said Kiran Ganesh, head of cross asset at UBS Global Wealth Management.

Investors are closely watching inflation data but the global picture is mixed: US data on Tuesday showed inflation cooling and having possibly peaked, but inflation in Britain was the highest in years, according to data on Wednesday.

Major banks have told clients to reduce their exposure to stocks, with many market participants expecting the equity bull run to end.

The US dollar rose, with the dollar index up 0.2 percent on the day at 92.631 at 0739 GMT.

The euro was down 0.2 percent at US$1.17865.

The Australian dollar – which is seen as a liquid proxy for risk appetite – was 0.2 percent weaker at US$0.73195.

Jobs data showed that Australian employment dived in August as coronavirus lockdowns in Sydney and Melbourne forced businesses to lay off workers and slash hours.

US weekly jobs data and monthly retail sales are due later in the session.

"Even with the slowing in retail sales over recent months, retail sales are still nearly 20 percent above the pre-COVID baseline and our US colleagues think the slowing/normalization to come will likely remain in place well into 2022," wrote RBC analysts in a note to clients.

Oil prices slipped, paring some of the large gains made in the previous session after a larger-than-expected fall in crude oil stocks in the United States.

Germany's benchmark 10-year yield hit a two-month high ahead of a pick-up in issuance. European Central Bank head Christine Lagarde is due to speak at 1200 GMT.

The US 10-year Treasury yield was steady at 1.3056 percent.