European shares on Friday fell as doubts over trade deal between the UK and EU and a stimulus package in the US capped gains at the end of a solid week.
The pan-European STOXX 600 index broke a four-day rally to end 0.35 percent lower at 395.90, reversing gains that followed a surprise rise in German business morale this month.
The German DAX gave up gains of as much as 0.8 percent to end 0.27 percent in the red at 13,630.51. It was up 3.94 percent from a week earlier.
The Ifo Institute’s upbeat data came even as Europe’s biggest economy went into a strict lockdown to contain a second wave of COVID-19 infections.
Britain’s exporter-heavy FTSE 100 index lost 0.33 percent to 6,529.18, ans was also down 0.27 percent for the week, despite a weaker pound, after Britain and the EU said that they remained far apart on a number of issues and that it was becoming more likely they would fail to reach a trade agreement before a Dec. 31 deadline.
“This is the real final crunch time, so that will likely effect the markets in a broader sense rather than just the pound play,” said Connor Campbell, a financial analyst at Spreadex.
The US Congress looked increasingly unlikely to meet a deadline to agree on US$900 billion in fresh COVID-19 aid, but passed a third stopgap spending bill to keep the government from shutting down at midnight.
“Markets are heading into the weekend with these two big unknowns. Investors may not get to react until Monday morning because the answer, especially for Brexit, might be between Sunday and Monday morning,” Campbell said.
The STOXX 600 ended the week with a 1.48 percent gain, its sixth week in the black in seven weeks.
Optimism around vaccine rollouts in the UK and potential rollouts in other part of Europe before the year-end, as well as progress in US stimulus talks underpinning hopes of a global economic recovery, lifted sentiment this week.
Travel and leisure stocks on Friday slipped, with British Airways owner International Consolidated Airlines Group S.A down 2.1 percent after a media report that it had agreed to buy Spanish carrier Air Europa for 500 million euros (US$612.87 million).
Dutch health technology firm Royal Philips NV rose 1.7 percent after it agreed to buy US cardiac diagnostics and monitoring firm BioTelemetry Inc in a deal worth US$2.8 billion.
Finnish paint producer Tikkurila Oyj soared more than 60 percent after US firm PPG Industries Inc made an offer to buy the company for 1.1 billion euros.
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