European shares on Friday slid in thin trade as shares in energy firms and banks dropped, ending a lackluster week relatively little changed.
The pan-European STOXX 600 on Friday closed 0.2 percent lower at 391.35, a drop of 0.04 percent from 391.51 a week earlier.
Banks were the biggest drag, falling 0.6 percent and hitting a one-week low earlier in the session.
Traders cited worries over the political situation in Italy and concerns surrounding ailing regional banks Banca Popolare di Vicenza and Veneto Banca SpA, even though Italy’s economy minister on Thursday sought to reassure investors that they would not be hit in any rescue of the two banks.
In the sector, Italian banks Intesa Sanpaolo SpA, Mediobanca SpA and UniCredit SpA reduced losses after earlier falls, while Germany’s Deutsche Bank AG, Bank of Ireland and Britain’s Lloyds Bank PLC were among the biggest fallers.
Analysts also flagged “uninspiring news flow” from global regulators of the Basel Committee.
A top official on Thursday said the committee would soon finalize rules to ensure banks hold enough capital to withstand rocky markets without taxpayer aid.
Oil stocks were the biggest sectoral fallers, down more than 1 percent as the oil price tumbled following OPEC’s decision to extend a production cut to March next year, which disappointed investors.
“In hindsight, we can now clearly say that there must have been a substantial amount of anticipation in the market for not only an extension of cuts, but also for deeper cuts,” Group SEB SA chief commodities analyst Bjarne Schieldrop said in a note.
Heavyweights Royal Dutch Shell PLC and Total SA both declined about 0.6 percent.
A further slump in Petrofac Ltd took losses in the British oilfield services firm close to 38 percent over the past two sessions after several brokers more than halved their price targets on the stock.
The company lost one-third of its market value in the previous session after it suspended its chief operating officer amid a fraud investigation.
More broadly, analysts pointed to recent euro strength as a drag for European equities.
“Those markets have run quite far and the fact that the euro has been strong ... particularly against the [US] dollar, maybe we are getting to the stage where that’s slightly putting the brakes on that advance,” Peel Hunt economist and strategist Ian Williams said.
However, Britain’s FTSE 100 was a bright spot, with the index closing on Friday at a record level of 7,547.63 and posting its fifth week of straight gains as sterling weakened more than 1 percent. The index closed at 7,470.71 on May 19.
Additional reporting by staff writer
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