EUROPE MARKETS: European Stocks Slip, But Set For Weekly Gains

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- Most European stocks slipped Friday, but the regional equity benchmark remained poised for a weekly advance after an improvement in U.S. economic conditions spurred buyers back into action.

The Stoxx Europe 600 index lost grip of gains and shed 0.1% at 327.27, as mining stocks came off their highs and finance issues weakened. Still, the benchmark was in line for a weekly rise of 1.6%, which would mark its first gain since the week ended Feb. 21.

The U.K.'s FTSE 100 index pared its advance to 3 points at 6,543.54. Underperforming the broader market, Burberry Group PLC fell 2.6% after Bank of America Merrill Lynch downgraded its rating of the luxury-goods company to neutral from buy.

Among other country-specific indexes, Germany's DAX 30 index rose 0.2% to 9,312.61, and France's CAC 40 index was lifted by 0.1% to 4,330.45. Shares of Bouygues SA fell 0.9% after the French company on Thursday raised the cash portion of its offer to acquire SFR, Vivendi SA's mobile unit.

European stocks had built on a modest rise at the end of Thursday's session. In that session, the index was firmly lower until U.S. stocks reversed their losses, in part on a report showing a bounce-back in the Philadelphia-area manufacturing sector. Asian stocks overnight followed up with gains for major indexes. U.S. stocks had opened higher, but had also briefly fell into the red.

This week, stocks came under pressure after U.S. Federal Reserve Chairwoman Janet Yellen, in her first news conference at the helm of the central bank, indicated that an interest-rate hike may arrive earlier than expected in 2015.

Europe's Spring election season will begin this weekend, with the first round of municipal elections in France, noted Win Thin, head of emerging market currency strategy at BBH.

"Although the Socialists may hold on to Paris, the risk is that the Prime Minister's party is soundly trounced this weekend," wrote Thin. "Many will watch how Le Pen's National Front does, which is running around twice the candidates they did in the last municipal elections, as it gears up for the EU parliamentary elections in May." (Read more about the coming election in France http://www.marketwatch.com/story/french-vote-could-show-rise-in-anti-euro-feelings-2014-03-21.).

In Russia, the MICEX Index dropped 1.2% after the U.S. imposed sanctions on four influential Russian businessmen and a bank, saying the penalties could apply to anyone who "has acted for or on behalf of, or that has provided material or other support, to a senior Russian government official." U.S. President Barack Obama on Thursday said the country was preparing broader sanctions should Russia take further steps into Ukraine.

Meanwhile, European Union leaders on Thursday agreed to asset freezes and visa bans on 12 more Russian officials, but sidestepped penalizing powerful oligarchs or companies.

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