LONDON - Global stocks dipped as European and Asian share indexes broadly retreated on Thursday, while oil prices rose further as markets weighed the risk of a widening Middle East conflict.

Eurozone stocks were last down 0.8 percent, as investors digested weak business activity survey data from the bloc, while MSCI's all-country index also slipped 0.2 percent.

Asia-Pacific shares outside Japan had earlier shed 1 percent.

Japan's Nikkei bucked the trend, up 2 percent after the country's newly elected prime minister Shigeru Ishiba said it was not the time to raise rates after meeting the central bank governor Kazuo Ueda. Bank of Japan board member Asahi Noguchi later said rates would increase cautiously and slowly.

Nasdaq futures dropped 0.5 percent and S&P futures slipped 0.4 percent.

Geopolitical tensions loomed large, after Israel bombed Beirut early on Thursday, following a year of clashes with Hezbollah.

Oil prices gained on Thursday as concerns grew that the conflict could disrupt crude oil flows from the key exporting region, overshadowing a stronger global supply outlook.

Brent and US crude futures gained around $1 each and were up at $71.11 and $74.83 respectively.

"Oil's had a good week. But in context, you're looking at kind of low 70s versus summer levels in the 80s. So I don't think there's a signal from the market to say, brace yourself for major escalation... But it's a volatile situation," said Eren Osman, managing director of wealth management at Arbuthnot Latham.

Safe haven flows muted

Safe haven flows in the wider market have so far been muted. Spot gold dipped 0.5 percent on the day to $2,644.99, but remained near a record high.

Treasury yields rose on Wednesday after a strong private payrolls report added to evidence of a healthy US labor market, lessening the risk of a big downside miss for Friday's non-farm payrolls data.

Two-year Treasury yields were little changed on Thursday at 3.6539 percent, while 10-year yields were at 3.8056 percent.

Markets imply a 35 percent chance the Fed will cut interest rates by another 50 basis points in November, compared with almost 60 percent last week, and have around 70 basis points of easing priced in by year-end.

In currencies, the euro was broadly flat at $1.1038, and not far from Wednesday's low of $1.10325, a level last seen on Sept 12, while the US dollar index gained 0.2 percent to 101.88.

Sterling fell 1.1 percent to $1.3115 after Bank of England Governor Andrew Bailey told the Guardian newspaper that the central bank could become a "bit more aggressive" on rate cuts if inflation continued to ease.