UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Stoxx 600 finishes the week with a 1% decline

European stocks suffered their worst daily fall in three weeks Friday, weighed by strength in the euro, as the flow of corporate quarterly results failed to provide a lift.

The Stoxx Europe 600 was slammed lower by 1% to 380.16. Industrial, tech and the oil-and-gas put in particularly weak performances, as crude-oil prices slumped and as the enthusiasm for technology shares cooled following a sharp, recent rebound for that sector.

CMC Markets' markets analyst David Madden in a Friday research note attributed the downdraft in the market to "the strong euro," which "took its toll on Continental markets."

The Stoxx 600 ended the week with a 1.9% decline overall. Friday's fall represents the worst single-session decline for the pan-European equity gauge since June 29, 2017, according to FactSet data. Meanwhile, London's FTSE 100 notched (http://www.marketwatch.com/story/ftse-100-edges-up-reaches-for-a-weekly-win-2017-07-21)1% advance for the week.

Euphoric euro: The euro traded at a two-year high against the dollar, buying $1.1678, extending gains from Thursday when the shared currency settled at its strongest level since Jan. 15, 2015 (http://www.marketwatch.com/story/euro-sits-at-2-year-high-as-hawkish-view-on-ecb-dominates-2017-07-21). Investors sent the euro flying even as European Central Bank President Mario Draghi struck a dovish tone about monetary policy when he spoke during the previous session.

"The fear the European Central Bank will discuss the possibility of trimming its bond buying scheme later this year has driven investors to dump their eurozone equities. To make matter worse, the relative strength of the euro is making eurozone stocks more expensive," said Madden.

Draghi said policy makers will discuss its bond-buying program in "autumn," but he didn't say whether that meant the ECB's September policy meeting. The ECB buys EUR60 billion a month of government bonds and other assets.

"Stock markets across Continental Europe have been flooded with money over the past few years because of the extremely aggressive monetary policy of the European Central Bank, and now the cash is making its way out of the region, and dragging the London market lower with it," Madden added.

Read:Nobody told the euro that Mario Draghi was dovish (http://www.marketwatch.com/story/nobody-told-the-euro-that-mario-draghi-was-dovish-2017-07-20)

The euro briefly pared gains during Friday's session after the ECB's survey of economists showed they, on average, reduced expectations for inflation for this year and the next two years, by 0.1 percentage points each. Inflation should rise to 1.5% in 2017, to 1.4% in 2018 and 1.6% in 2019, the survey showed. Subdued inflation has been viewed by some as a telltale signal that the eurozone economy isn't yet firing on all cylinders--a point that Draghi tried to drive home during a news conference on Thursday following the ECB's policy statement.

Stock movers: Investors had more corporate financial updates to sort through on Friday.

Shares of Philips Lighting NV (LIGHT.AE) tumbled 6.9% after the Dutch company posted a decline in second-quarter sales to 1.70 billion euros and a fall in comparable sales. Profit, however, was higher.

Meanwhile, Valeo SA shares (FR.FR) sank 6.9% as the French car-parts manufacturer's first-half sales increased to EUR9.46 billion, but still fell short of expectations of EUR9.56 billion from a Reuters survey of analysts.

On the upside, Vodafone (VOD.LN) picked up 0.5% after the mobile-phone services provider reiterated its earnings outlook for the full year (http://www.marketwatch.com/story/vodafone-revenue-drops-on-forex-effects-2017-07-21).

Meanwhile, Paysafe Group PLC (PAYS.LN) leapt 6.8% after the British electronic-payments company said Friday it received a possible all-cash buyout offer (http://www.marketwatch.com/story/paysafe-lands-all-cash-offer-from-blackstone-cvc-2017-07-21) from funds managed by Blackstone and CVC Capital Partners. The bid represented an 8.9% premium to Thursday's closing price of GBP5.42 a share.

Individual indexes: The U.K.'s FTSE 100 ended the session off 0.5% at 7,452.91. (http://www.marketwatch.com/story/ftse-100-edges-up-reaches-for-a-weekly-win-2017-07-21)

France's CAC 40 index dropped 1.6% to 5,117.66. In Frankfurt, the DAX 30 index , which is heavily weighted by exporters, dropped 1.7% to 12,240.06, also marking its worst daily drop since June 29.

Spain's IBEX 35 fell 1.3% at 10,426.60, and Italy's FTSE MIB declined 1.1% to close at 21,202.16.

(END) Dow Jones Newswires

July 21, 2017 13:36 ET (17:36 GMT)

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