European stock exchanges wilted on Friday due to investor concern about continued interest-rate hikes in the eurozone and the US and in response to disappointing corporate news.
The London FTSE 100 index fell 0.25 percent to close at 5,517.4 while the Frankfurt DAX finished flat, off 0.09 percent at 5,282.13. In Paris the CAC 40 slipped 0.19 percent to 4,661.01.
The Euro STOXX 50 index of leading eurozone shares gave up 0.27 percent to finish at 3,500.80.
Analysts in Paris said investors grew anxious following the appearance of a press interview on Friday in which German central bank head Axel Weber, a member of the board of governors of the European Central Bank, suggested that the ECB could soon approve a further hike in eurozone interest rates.
The ECB last week raised its benchmark interest rate a quarter point to 2.25 percent, its first hike in five years.
The US Federal Reserve, according to IMF chief economist Raghuram Rajan, is likewise predicted to continue tightening monetary policy this month and again early in the new year.
But on the currency market the US dollar slipped against the euro amid a growing belief that Fed policymakers might in fact soften their rhetoric following next week's interest rate decision, signalling that their rate-hiking cycle may be nearing an end.
The euro rose to US$1.1820 in late European trading, from US$1.1818 late on Thursday in New York.
Wall Street shares hovered in a narrow range on concern over surging energy costs, with doubts starting to emerge about the rally that started in October.
The market was hit by heavy selling in Merck, due to a report that it withheld key information from a study on its controversial Vioxx treatment, and in Intel, hurt by a weaker-than-expected forecast in semiconductors.
In London, oil issues were hurt by Kuwait's sale of 185 million shares in BP to a banking consortium. BP fell 1.69 percent to ?6.40. Royal Dutch Shell shed 1.51 percent to ?18.86.
But retailers showed strength ahead of the holiday shopping season. GUS gained 3.69 percent to close at ?9.7050, while Marks and Spencer added 1.43 percent to reach ?4.79.
In Paris, oil group Total fell one percent to 217 euros on profit-taking that followed its surge on Thursday.
France Telecom was stable at 25.39 euros on news that it might be interested in acquiring Arcor, the German fixed-telephone subsidiary of Britain's mobile phone giant Vodafone.
Chip maker Infineon gave up 0.89 percent to reach 7.78 euros after falling from fifth to seventh place in worldwide sales according to estimates from the Gartner research group.
Elsewhere there were declines of 0.24 percent to 3,448.05 on the BEL-20 in Brussels, 0.16 percent to 34,811 on the SP/MIB in Milan, 0.06 percent to 10,489.3 on the IBEX-35 in Madrid and 0.25 percent to 431.13 on the AEX in Amsterdam.
The Swiss Market Index rose 0.10 percent to 7,567.40.
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