European shares were muted on Friday, as losses in tech and consumer stocks were limited by gains in heavyweight banks, but were set to end a week of economic data releases and central bank decisions with robust gains.
The pan-European STOXX 600 was down 0.1% at 584.96 as of 0309 GMT, a day after it logged its best one-day performance in more than three weeks.
Major regional markets traded in negative territory, with Germany's DAX and London's FTSE 100 losing 0.1% each.
Most major sectors inched lower, with personal and household goods trading at the bottom. German sportswear retailers Adidas and Puma fell 0.7% and 2.2%, respectively, after U.S. peer Nike reported a drop in gross margins for the second consecutive quarter.
On the flip side, banks gained 0.2% and were among the top gainers on the benchmark index.
Market sentiment improved following Thursday's unexpected slowdown in U.S. consumer price inflation, strengthening expectations for Federal Reserve interest rate cuts in 2026.
However, analysts cautioned against over-optimism, noting that the data was likely distorted downward by the recent government shutdown and should be interpreted with caution.
Meanwhile, European Union leaders decided to borrow cash to loan 90 billion euros ($105 billion) to Ukraine to fund its defence against Russia for the next two years rather than use frozen Russian assets, which sent yields on German bonds higher.
(Reporting by Ragini Mathur)
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