European shares were down 0.7 percent in morning trade, as investors fretted about Greece's political deadlock and disappointing Chinese trade data.

Greek leftist leader Alexis Tsipras gave up his attempt to form a new government on Wednesday, pushing the debt-stricken country closer to its second election in a few weeks and prompting impatient European governments to withhold part of the latest tranche of rescue funds to be paid on Thursday.

Greek Socialist leader Evangelos Venizelos will make a last-ditch attempt to form a government, but chances are seen as slim that Venizelos can clinch a deal after both the conservatives and leftists tried and failed.

Investors were also rattled by trade data out of China showing headline growth in imports unexpectedly stalled last month and exports were weaker-than-expected, raising doubts about the strength of the rebound in the world's second-biggest economy.

Annual growth in imports in April was just 0.3 percent, far below expectations for an 11 percent increase in a Reuters poll and also weaker than the 5.3 percent year-on-year rise in March.

Cisco Systems Inc (CSCO.O) will be in focus after it forecast quarterly earnings below Wall Street's expectations, accentuating concerns about global technology spending and the network equipment maker's ability to weather persistent economic weakness. Its shares traded in Frankfurt (CSCO.F) slumped 8.8 percent.

Yahoo Inc's (YHOO.O) largest outside shareholder said the Internet company should make its finance chief or head of media the interim chief executive because of the controversy surrounding CEO Scott Thompson's educational background.

Foxconn Technology Group, which makes Apple Inc's (AAPL.O) products, is confident of achieving 10 percent revenue growth this year, chief Terry Gou said on Thursday, as it plans new China headquarters in Shanghai.

Deutsche Telekom (DTEGn.DE) stuck to its full-year outlook after posting flat core earnings on Thursday, signaling a stabilization in its European business and at T-Mobile USA, which lost fewer customers than in previous quarters.

Rupert Murdoch's News Corp (NWSA.O) posted a stronger-than-expected quarterly profit on Wednesday, aided by its cable networks and movie studio business, and its shares rose 2.7 percent in post-market trade.

The Organization for International Investment said on Thursday that foreign investment in the United States is ebbing and beefing it up is critical for economic growth as each job at a foreign company's U.S. unit supports three others.

Activision Blizzard Inc (ATVI.O) raised its earnings outlook on Wednesday and showed investors it was able to bring an end to the exodus of subscribers from its largest Internet game, "World of Warcraft," that had hurt the company in recent quarters.

PetroChina Co Ltd (0857.HK) is in talks to buy Valero Energy's (VLO.N) shuttered refinery in Aruba, sources said, the latest move by China's oil giants to take advantage of a global refining downturn to beef up supply.

ArcelorMittal (ISPA.AS), the world's largest steelmaker, forecast higher profit in the second quarter after improving U.S. sales in the first three months offset anemic European operations to push earnings ahead of expectations.

The Luxembourg-based company said demand grew in North America in the automotive, construction and earth-moving equipment and white goods sectors.

Sony Corp (6758.T) expects to return to profit this year, as it aims to halve the losses in its TV business that pushed the Japanese consumer electronics giant to a record loss of $5.74 billion in the year just ended.

Brent crude slipped below $113 on Thursday, after weaker-than-expected Chinese trade data raised concerns over energy demand by the world's second-largest oil consumer.

On the macro front, investors awaited March U.S. international trade data, due at 1230 GMT. Economists in a Reuters poll expect a trade deficit of $50.0 billion in March versus a deficit of $46.03 billion deficit in February. Also on deck, U.S. weekly jobless claims, due at 1230 GMT.

U.S. stocks fell for the fifth day in six on Wednesday as investors kept their focus on the turmoil in Europe, but news that Greece will receive its latest debt bailout payment helped cut losses late in the session.

The Dow Jones industrial average .DJI finished down 97.03 points, or 0.75 percent, at 12,835.06. The Standard & Poor's 500 Index .SPX fell 9.14 points, or 0.67 percent, to 1,354.58. The Nasdaq Composite Index .IXIC dropped 11.56 points, or 0.39 percent, to 2,934.71.

(Reporting by Blaise Robinson; Editing by Susan Fenton)

• A Permanent Economic Emergency