European equities extended losses on Friday, with investors worried by rising interest rates, an IMF warning about the US economy and a dip in German business confidence.
They also took time to digest new developments surrounding a possible takeover of Borsa Italiana, which owns Milan's stock exchange.
The FTSE 100 index of top shares fell 0.43 percent to 6,567.40 points in London, the Paris CAC 40 slid 0.11 percent to 6,023.25 and Frankfurt's DAX 30 lost 0.19 percent to 7,949.63.
The DJ Euro STOXX 50 index of leading eurozone shares gave up 0.21 percent to 4,479.36 points.
Much attention focused on suitors for the Borsa Italiana in Milan, with the Wall Street Journal reporting that NYSE Euronext, the new transatlantic stock exchange, had bid 1.5 billion euros (US$2 billion) for the Italian stock market, matching an offer from the London Stock Exchange.
The London Stock Exchange said on Wednesday only that it was considering a possible merger with Borsa Italiana, which operates stock, bond and derivatives markets.
Directors at the Milan exchange have given their backing to a merger with the London market, the Italian news agency Ansa reported later on Friday.
Borsa Italiana administrator Massimo Capuano received authorization from the board to work out details of the deal, which would take place through an exchange of shares, the agency said.
"I am very satisfied," it quoted Massimo Segre, a member of the Borsa Italiana board, as saying.
In Frankfurt, trading was dampened by a German Institute for Economic Research survey of German business confidence which showed it had cooled unexpectedly in June as the prospect of rising interest rates and high oil prices undermined the eurozone's biggest economy.
Late trading was marked by an IMF report which said the US economy appeared to be emerging from a period of sluggish growth but was "uncomfortably close" to the "stall speed" associated with past recessions.
In Amsterdam, the AEX index lost 0.33 percent to 548.75 points, the Swiss SMI was down 0.69 percent at 9,166.49, in Milan the SP/MIB shed 0.60 percent to 42,154, in Madrid the IBEX-35 was off by 0.66 percent at 14,784.90 and in Brussels the BEL-20 slipped by 0.11 percent to 4,641.55 points.