* Crude recovers after OPEC disappointment
* European stocks open down, track Asia
* Sterling hit as PM May's pre-election poll lead shrinks
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Dhara Ranasinghe
LONDON, May 26 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.
"With this kind of momentum and almost two weeks to go until
the vote, not only is this not going to be the breeze that May
anticipated when she called the snap election last month, it
could yet turn into a humiliating defeat for the Conservative
leader and her party," said Craig Erlam, senior market
analyst at OANDA.
"Coming on the back of losses yesterday, it's turning into a
rotten end to the week for the pound."
Sterling's weakness, good news for exporters, helped keep
London's blue-chip FTSE-100 stock index in positive
territory just as other European bourses fell .
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.
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Oil edged higher but remained on the back foot after
tumbling 5 percent in the previous session.
On Thursday in Vienna, the Organization of the Petroleum
Exporting Countries (OPEC) and some non-OPEC producers agreed to
extend a pledge to cut around 1.8 million barrels per day (bpd)
until the end of the first quarter of 2018 - disappointing
investors betting on longer or larger curbs.
Clawing back some of Thursday's losses, Brent crude futures
were at $51.80 per barrel at 0755 GMT, up 0.66 percent,
from their last close. They were still set to end Friday with a
weekly loss of more than 3 percent, however.
U.S. West Texas Intermediate (WTI) crude futures were
below $50, at $49.15, though still up 16 cents from their last
Elsewhere, the dollar slipped 0.5 percent to 111.25 yen
, while the dollar index, which tracks the
greenback against a basket of six major peers, was 0.14 percent
lower at 97.110.
The euro was virtually flat on the day at $1.1212.
The weaker dollar and pullback in risk appetite were a boon
for gold. Spot gold rose 0.5 percent to $1,261 an ounce,
poised for a 0.5 percent gain for the week.
(Additional reporting by Nichola Saminather in Singapore;
Editing by Kevin Liffey)