Global stocks were roughly flat but oil prices hit a two-year high Monday as investors watched for developments in Saudi Arabia after a string of arrests as part of a corruption crackdown.
The Stoxx Europe 600 index was unchanged from its closing level Friday in midmorning European trading.
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However, oil prices gained after the wave of arrests in Saudi Arabia of princes, businessmen and government ministers.
Shortly after European markets opened, West Texas Intermediate crude oil was up by 0.4% at $55.86 a barrel, having touched a high of $56.19 in early European trading, the highest in over two years. Brent crude was up 0.5% at $62.37 a barrel.
Oil, gas and commodity-focused stocks were among the best performing in Europe, with Tullow Oil and BHP Billiton each up by over 2% and Anglo American up by 1.8%.
The oil-and-gas sector of the Stoxx Europe 600 was up 0.3%. Banking stocks were among the worst performing in Europe, with the sector down 0.6%.
U.S. equity futures were roughly flat, with S&P 500 futures down by less than 0.1% in early European trading, with investors also keeping a close eye on tax-reform plans.
The Ways and Means Committee of the U.S. House of Representatives will consider tax reform this week with the aim of passing the proposed bill before Christmas.
"We continue to believe that tax legislation has around a two-thirds chance of becoming law by early 2018," Jan Hatzius, chief economist at Goldman Sachs, said in a research email. "The release of the House legislation is a positive step in that it moves the process forward."
U.S. tax changes aren't just expected to influence equity markets--some analysts believe bond markets could be shifted by any stimulus included in the final bill.
"In terms of the impact on equity markets we think it might put something like another 5% on earnings, but you'd expect interest rates to rise maybe a little bit faster," said Mike Bell, global market strategist at J.P. Morgan Asset Management.
"It is a risk for bond yields, because I just don't think it's priced in, " Mr. Bell said. "We're underweight bonds."
U.S. bond yields edged down slightly from closing levels Friday. The yield on 10-year U.S. Treasurys dipped to 2.325% from a close of 2.334% last week.
In Asia, Hong Kong's Hang Seng Index fell by as much as 1.6% earlier in the session, before reversing losses to close down just 0.02%.
Some market participants credited political unrest in Saudi Arabia with sparking short-lived investor jitters in Hong Kong.
"Hong Kong didn't get a chance to respond to the situation over the weekend [and] everything risky in the overseas market affects Hong Kong more than in other Asian markets," said Hao Hong, head of research at BOCOM International.
Comments from China's central bank Governor Zhou Xiaochuan about rising risks to China's financial system reignited worries of a crackdown on leverage on the mainland, according to Ivan Ip, a stocks strategist at UOB Group.
Mr. Zhou wrote in an article posted Saturday on the website of the People's Bank of China that the risks of China's financial system were increasing. He described the risks as being "hidden, complex, sudden, contagious and hazardous."
Elsewhere, Japan's Nikkei Stock Average reversed early gains, as traders returned after a three-day weekend. The index closed up 0.04%.
The yen pared early sharp declines against the U.S. dollar, when Bank of Japan Governor Haruhiko Kuroda said the central bank would be patient about easing. The dollar was last up 0.1% at Yen114.13 after earlier hitting an intraday high of Yen114.73.
The WSJ Dollar Index which measures the greenback against a basket of international currencies, was roughly flat.
contributed to this article.
Write to Mike Bird at Mike.Bird@wsj.com and Ese Erheriene at email@example.com
(END) Dow Jones Newswires
November 06, 2017 06:30 ET (11:30 GMT)