European stocks were lower on Friday with pharmaceuticals and semiconductor makers leading the way down.
The expiration of December derivatives contracts known as triple witching was less volatile than expected. Traders described the rollover of stock index options, stock index futures and individual stock options across the region as a "quiet affair."
Investors were also reacting negatively to higher oil prices, which act as a tax on corporate profits. Crude futures edged up to US$46 on Friday as traders braced for higher home-heating usage as winter chills spread across the US. Fears over supply disruptions from Russia and Nigeria also re-emerged.
The Dow Jones STOXX 600 Index, which tracks Europe's 600 largest listed companies, was down 0.7 percent at 249.24.
The Dow Jones Euro STOXX Index, which tracks companies in countries that joined the common currency, was 1.0 percent lower at 239.10.
At the close of trading, London's FTSE-100 Share Index was 0.8 percent lower at 4,696.8, while in Paris the CAC-40 Index was 1.7 percent lower at 3,744.92. Frankfurt's Xetra DAX Index was down 1.2 percent at 4,182.27.
An unexpectedly strong German IFO business sentiment survey failed to spark buying interest. The IFO index rose to 96.2 this month from last month's 94.1, its highest level since April this year and well above analysts' forecasts of 93.8.
"This is an environment that can sometimes contribute to sharp movements in market prices," strategist Anais Faraj said.
Drug stocks were the main focus of the session.
Shares in AstraZeneca tumbled 8.3 percent to ?18.86 in London on news its lung-cancer drug Iressa failed to show significant survival rates. Goldman Sachs downgraded the stock to in-line from outperform following the update.
The news leaves the field open for rival drug Tarceva developed jointly by Roche, Genentech and OSI Pharmaceuticals. Shares in Roche ended up 1.3 percent at 127 Swiss francs in Zurich.
The sector was also hit by bearish news from US drug giant Pfizer. It said a study of its arthritis drug Celebrex in cancer prevention found a significant risk of cardiovascular problems.
Shares in European microchip manufacturers slid, following release of a report by Gartner that said worldwide semiconductor spending next year was projected to decline 15 percent. Infineon Tech shed 3.0 percent to 7.97 euro (US$10.57) in Frankfurt. ASML fell 2.4 percent to 11.73 euro (US$15.56), leading decliners in Amsterdam.
Oil and gas company Cairn Energy also had a bad day, falling 18.14 percent to ?11.15 and leading decliners in London. Cairn upgraded production targets at two major Indian oil fields, but news that part of the Rajasthan development area had proven disappointing sent the company's shares tumbling.
Adding to Cairn's woes was news the Indian government may impose a tax on crude-oil production. Cairn Energy said the tax, effectively a royalty payment, amounts to around US$3 a barrel.
In Paris, shares in EADS proved a market bright spot.
Shares climbed 1.1 percent to 21.15 euro (US$28.05), following the announcement of management changes at the aerospace giant. After weeks of boardroom wrangling, co-chief executive officer Philippe Camus confirmed he is leaving EADS, making room for Noel Forgeard, who now runs EADS subsidiary Airbus.
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