Oil edged up to stay above $95 a barrel after suffering its biggest one-day drop in 14 months. Major indexes closed out 2013 at or near record highs, but investors seemed reluctant to chase more gains in the new year.
China's benchmark Shanghai Composite Index shed 1.2 percent to 2,083.14, adding to the previous day's 0.3 percent loss after an HSBC Corp. survey showed manufacturing activity weakened in December.
"We expect the upcoming set of data releases to show China's economy losing steam in December," said UBS economist Tao Wang in a report.
In Europe, France's CAC-40 added 0.4 to 4,245.22 and Germany's Dax was up 0.1 percent at 9,408.36. Tokyo was closed for the last day of its New Year's break. South Korea's Kospi gave up 1.1 percent to 1,946.14 after Hyundai Motor Co. and Kia Motors Corp. said they expect sales growth in 2014 to be their weakest in a decade.
Hong Kong's Hang Seng tumbled 2.3 percent to 22,804.1. India's Sensex shed 0.7 percent to 20,754.6. Benchmarks in Singapore, Bangkok, Malaysia and Jakarta also declined. New Zealand bucked the trend to add 0.6 percent to 5,134.97.
Investors looked ahead to comments later Friday by U.S. Federal Reserve Chairman Ben Bernanke for indications about the possible pace of further reductions in monetary stimulus. The Dow Jones and Standard & Poors 500 futures were both off 0.1 percent in electronic trading on the Chicago Mercantile Exchange.
On Thursday, U.S. stocks fell despite data showing healthy December manufacturing growth. Analysts said prices were bound to pull back after higher corporate profits and Fed stimulus pushed markets to record levels in 2013. The S&P 500 turned in its worst performance in three weeks, declining 0.9 percent. The Dow Jones and the Nasdaq both slid 0.8 percent.
In currency markets, the U.S. dollar edged up 104.8 yen. The euro was down 0.1 percent at $1.366. Benchmark oil for February delivery gained 4 cents a barrel to $95.48 in electronic trading on the New York Mercantile Exchange. The contract plunged $2.98 the previous day to settle at $95.44.