* World stocks flat after two days of gains
* German Ifo steady, consumer mood at 3-year low
* U.S. futures point to flat open
* Sterling fragile after PM Johnson election call
* UK markets await news from Brussels on extension
By Karin Strohecker
LONDON, Oct 25 (Reuters) - Geopolitical tensions, muted economic data and mixed earnings stymied global stocks on Friday with sterling languishing near a one week lows amid a new bout of Brexit anxiety.
European stock markets traded broadly softer with the pan regional STOXX 600 slipping 0.3%, with Germany's DAX eased 0.2% while Britain's FTSE fell 0.4%.
Losses were led by the food and beverage sector weighed after the world's largest beer maker by Anheuser-Busch InBev tumbled 9% on disappointing quarterly profit and a glum outlook as the earnings season rumbled on.
Yet a luxury goods rally led by Kering helped lift France's CAC index 0.1% after its star fashion label Gucci posted stronger-than-expected sales, demonstrating how some brands have managed to shield from the fallout over protests in Hong Kong.
Meanwhile lacklustre data did little to quell underlying concerns over the health of the global economy. Germany's Ifo business climate came in broadly unchanged while the mood among consumers in the block's largest economy fell to its lowest in three years heading into November as job losses in the auto and financial sector made shoppers more pessimistic about the outlook for Europe's biggest economy.
"We may have reached the bottom in the euro zone, but there is still uncertainty that is troublesome in the U.S. Many accounts will be waiting for the Fed," said Cyril Regnat, a fixed income strategist at Natixis, referring to next week's meeting of the U.S. central bank with markets pricing a 90% chance of a rate cut.
The lacklustre performance in Europe follows a mixed picture in Asia where Japan's Nikkei finished up 0.2% and Chinese blue-chips gained 0.6% while Hong Kong's Hang Seng fell 0.28%.
U.S. futures pointed to a flat open on Wall Street following a mixed Thursday, which saw strong quarterly results from Microsoft and PayPal lift the Nasdaq 0.8% while the Dow Jones Industrial Average slipped 0.1% after 3M slashed its full-year earnings outlook.
Meanwhile Amazon.com Inc shares will be in focus after the company on Thursday forecast revenue and profit for the holiday quarter below expectations on fierce competition and rising costs from its plan to speed up delivery times globally
Trade talks are also back in focus with U.S. and Chinese trade officials due to discuss plans for China to buy more U.S. farm products while Beijing in return will request cancellation of some planned and existing U.S. tariffs on Chinese imports.
The two sides are working to try to agree on a text for a "Phase 1" trade agreement announced by U.S. President Donald Trump on Oct. 11, in time for him to sign it with China's President Xi Jinping next month at a summit in Chile. Though there are still large gaps to bridge.
However, a speech by U.S. Vice President Mike Pence on Thursday, which criticised China's handling of the Hong Kong protests and its treatment of Muslim Uighurs in the Xinjiang region, did jangle nerves.
"Geopolitical concerns such as the global trade war are keeping investor optimism in check," said Paula Polito, client strategy officer at UBS Global Wealth Management, adding the firm's latest survey had found that investors had opted to raise their holdings of cash well above usual levels.
A Reuters poll of economists showed that most think a steeper decline in global growth is more likely than a synchronised recovery, despite central bank easing.
In his last meeting as president of the European Central Bank, Mario Draghi left ECB policy and guidance unchanged, but advised his successor to "never give up" on propping up the eurozone economy in the face of a worsening outlook.
In currency markets, the dollar traded flat against a basket of six major currencies while the euro steadied after falling to a one-week low against the U.S. dollar in the previous session on the ECB leaving the door open for more monetary policy easing, but keeping interest rates unchanged.
The British pound edged down to $1.2823, extending a 0.5% drop on Thursday, after European Union failed to set a date for Britain's departure from the bloc while the UK parliament squabbled over Prime Minister Boris Johnson's call for a December election to break the deadlock.
Johnson conceded on Thursday for the first time that he would not meet his "do or die" deadline to leave the European Union next week.
"Because the UK Parliament passed the EU withdrawal agreement, we think downside for GBP will be limited," said Peter Kinsella, head of FX strategy at UBP. "However, the lead time until the general election may prevent material GBP appreciation until after the election."
EU ambassadors agreed in principle to a delay beyond the Oct. 31 deadline, but will not decide the length of the extension until Monday or Tuesday, an official said.
Euro zone bond markets have largely shrugged off the latest Brexit events, with the benchmark 10-year German government yield up 2 basis point at -0.38%.
The yield on benchmark 10-year Treasury notes also held steady.
Oil prices steadied after suffering falls earlier in the session, but were on track for strong weekly gains as support from a surprise draw in U.S. inventories and possible action from OPEC and its allies to trim production further outweighed broader economic concerns.
West Texas Intermediate (WTI) crude stood at $56.17 a barrel and global benchmark Brent crude at $61.62 per barrel.
Reporting by Karin Strohecker, Additional reporting by Sujata Rao and Tommy Wilkes in London; Editing by Toby Chopra