European stocks pared a weekly rally, erasing gains in the final hour of trading after Ukraine said its troops partially destroyed a military convoy that entered the country from Russia.
SVG Capital PLC lost 4.5 percent after Permira Holdings Ltd sold its entire stake in the company, while Hennes & Mauritz AB advanced after posting a surge in sales last month.
The STOXX Europe 600 Index fell 0.4 percent — the most in a week — to 329.72 at the close of trading in London, paring its weekly increase to 1.5 percent.
The gauge had rallied as much as 0.9 percent earlier on Friday. It has dropped 5.7 percent from a six-year high reached on June 10 as US President Barack Obama authorized air strikes against militants in Iraq and concern grew that fighting in Ukraine would disrupt world trade.
“The big issue for markets is proof of the credibility of those reports out of the crisis area,” Guillermo Hernandez Sampere of MPPM EK wrote in an e-mail. “For weeks now we were getting news [that] Russian troops would cross the border, but these weren’t proved. Any escalation is driving investors to risk-off mode.”
Ukrainian military spokesman Andriy Lysenko told reporters in Kiev that government troops engaged the Russian armed vehicles that had arrived overnight through a rebel-held section of the border.
Ukrainian soldiers continue to come under shelling, including rounds fired from Russia, he said. Moscow said it was concerned about an attack on another convoy carrying aid.
The STOXX 600 climbed 1.9 percent this week through yesterday as companies from EON SE to Swiss Life Holding AG posted better-than-estimated earnings and weaker data on eurozone growth fueled speculation that the European Central Bank may need to increase stimulus.
The index was heading for its biggest weekly gain of the year before erasing yesterday’s rally.
National benchmark indices fell in 11 of the 15 Western European markets open on Friday. France’s CAC 40 Index dropped 0.7 percent, the DAX lost 1.4 percent and the UK’s FTSE 100 Index gained less than 0.1 percent
Markets in Greece, Italy and Austria were closed on Friday for the Assumption Day holiday. The number of shares changing hands in STOXX 600 companies was 36 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
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