European stocks lost momentum on the final day of their best week in a month amid mixed earnings reports.
Software maker SAP SE added 3.4 percent after raising its earnings and sales projections, while Ericsson AB slid 5.9 percent after posting a loss. Daimler AG fell 2.1 percent as it cut its revenue forecast.
Deal activity also moved shares: British American Tobacco PLC reversed gains to slide 2.9 percent after a report that Reynolds American Inc might deem its unsolicited bid for full ownership inadequate.
Burberry Group PLC gained 3.1 percent on a report Coach Inc is considering merging with it.
In a week dominated by earnings reports and the European Central Bank’s (ECB) policy update following speculation about an extension to quantitative easing, the region’s equities climbed for three straight sessions before stalling.
The STOXX Europe 600 Index was unchanged at the close on Friday, taking its five-day advance to 1.3 percent.
“Apart from those sectors that are multinational in their exposure, there is not that much possibility for large growth” in earnings, London-based CMC Markets market analyst Jasper Lawler said. “In the short term, if more QE [quantitative easing] is coming, that will be positive for European stocks, but it is not going to catalyze some major bull market this time. It’s a ‘buy rumor, sell the fact’ phenomenon.”
Easing investor concern that monetary policies will be tightened too soon, ECB President Mario Draghi on Friday said it is unlikely that its bond-buying plan will end abruptly.
Still, he left questions unanswered about how the bank will extend, adjust or wind down the program that is set to expire in March.
A gauge of STOXX 600 banks climbed for a fourth day, closing at its highest level since the UK’s secession vote.
Lenders have rallied this month, led by those in Italy and Spain, on speculation the ECB might tweak its stimulus in ways that will boost profitability, a key concern in a low-rate environment.
The FTSE MIB Index and the IBEX 35 Index rose more than 3.4 percent this week, among the best performers in Western European markets.
Miners led gains in the STOXX 600, closing at a 14-month high following a rise in the US dollar.
ArcelorMittal and Anglo American PLC added 2.8 percent or more.
The earnings season is picking up pace in Europe, with more than 100 STOXX 600 companies scheduled to release figures next week. Among those reporting are lenders Deutsche Bank and Barclays PLC, drugmaker Novartis AG and carmaker Volkswagen AG.
Analysts have tempered estimates for this year’s profit declines for the first time since early last month.
They project a drop of 4.3 percent for the period, followed by double-digit earnings growth in each of the next two years.
The STOXX 600 has risen 0.4 percent this month, erasing a drop of as much as 2.1 percent.
The gauge has risen in five of the past six Octobers. Still, a slump of 5.9 percent this year has dragged its valuation to 14.8 times the estimated earnings of its members, making it about 11 percent cheaper than the S&P 500 Index.
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