By Jeremy Gaunt, European Investment Correspondent
(Reuters) - World stocks were flat on Wednesday, held back by losses in Europe that were partly caused by energy shares taking a beating from the weaker oil price.
Wall Street looked set to open flat.
Shares of global miner BHP Billiton remained in focus, falling 2 percent in London on concerns that it may have to overpay for Canadian fertiliser group Potash Corp after the Canadian group rejected an initial offer.
The dollar was flat against a basket of major currencies, weakening particularly against the yen on growing speculation that Japanese authorities are unlikely to intervene to counter their currency's recent strong run.
Europe's FTSEurofirst 300 was down 0.4 percent, dragged lower by energy stocks. The STOXX Europe 600 Oil & Gas index was down 1.1 percent.
Oil prices have been hit by worries about global economic growth and high inventories.
An industry report signalled petroleum inventories in top consumer the United States were headed for a record, following an unexpected sharp increase in crude stocks last week.
U.S. crude for September delivery was off more than $1 at $74.72 a barrel. It is down around 4 percent this month.
World shares as measured by MSCI and Thomson Reuters were up less than 0.1 percent. Japan's Nikkei earlier closed up nearly 0.9 percent.
Traders warned against reading too much into market moves at the moment given that it is high summer in the northern hemisphere and there are major questions about the direction of the world economy.
"The market is still rangebound. There is no conviction at the moment, and this will go on until September when investors come back from holiday," said Alexandre Le Drogoff, technical analyst at Aurel BGC in Paris.
SOVEREIGN WORRY
The euro cut losses against the dollar, while sterling rebounded as investors reversed short positions after the release of minutes from the Bank of England's last policy meeting.
"Dollar/yen is headed towards the 85 yen level and there is little that can be done to prevent that," said Kenneth Broux, markets strategist at Lloyds TSB Financial Markets. "There is talk the Japanese won't intervene as yet, and of course Japanese yields are still positive."
The dollar shed 0.3 percent against the yen to 85.29 yen, not far from a 15-year low of 84.72 yen hit on trading platform EBS last week.
The euro was down 0.05 percent at $1.2872.
Longer-dated German bonds rallied after Berlin drew strong demand at a 5 billion euro sale of new 10-year paper at a record low average yield.
(Additional reporting by Blaise Robinson and Anirban Nag; editing by Stephen Nisbet)
