European shares ended a three-session winning streak on Friday on the last full trading day of the year, as traders failed to find inspiration after gloomy economic data on both sides of the Atlantic amid thin volumes.
The pan-European Dow Jones STOXX 600 index fell 0.2 percent to 364.39, as telecom-equipment Alcatel-Lucent dropped 2.7 percent, Spanish conglomerate Grupo Ferrovial fell 2.6 percent and telecom giant BT Group slipped 2.2 percent.
The decline came as data showed a sharper-than-expected drop in US new-home sales and a second straight fall in British house prices, which followed Thursday's disappointing US durable-goods orders.
The figures, combined with continued jitters from the assassination of Pakistani opposition leader Benazir Bhutto, pushed up the euro, which climbed 0.7 percent against the dollar and touched a new record against the pound. The euro's strength hurts the competitiveness of European firms that export.
Among national indexes, the UK FTSE 100 index lost 0.3 percent at 6,676.90 and the French CAC-40 index finished a fraction of a point lower, at 5,627.25.
"Volume is reasonably low. It's very, very quiet," said Heino Ruland, strategist at consultancy FrankfurtFinanz.
Markets in London, Paris, Amsterdam and Brussels will have a half-session tomorrow, while the German and Swiss stock markets will be shut.
The German DAX 30 index ended a holiday-shortened trading session -- its last of the year -- with a gain of 0.4 percent to 8,067.32.
Leading the gains was sportswear maker Adidas, which closed up 2.6 percent, and Altana, up 2.7 percent.
The DAX 30 has outperformed the UK and the French equity markets this year, posting a gain of around 22 percent, while UK stocks have risen 4 percent and French stocks posted a gain of 1 percent.
Ruland said German stocks this year benefited from growing demand from emerging markets.
"It's a major beneficiary from globalization and has experienced strong demand from BRIC countries such as Brazil, China and India, which has resulted in above-average earnings growth for companies," he said.
In London, shares of HSBC Holdings traded down 0.6 percent. The Wall Street Journal reported that US and European banks -- including HSBC and Citigroup -- are considering sales of assets, from branches to entire business units.
Oil producers rose with crude futures holding above US$97 a barrel.
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