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* Sanofi falls 4% as COVID-19 vaccine candidate delayed
* STOXX 600 down 1% on the week
* Ericsson files U.S. lawsuit against Samsung
* Rolls Royce slumps, downgrades cash outflow forecast
* Sunday deadline for Brexit trade deal eyed
(Updates to close)
By Susan Mathew
Dec 11 (Reuters) - European shares slipped on Friday, ending
an action-packed week on a somber note on worries over the
economic impact of the resurgent COVID-19 pandemic and the fate
of a Brexit trade deal.
The pan-European STOXX 600 index .STOXX slid 0.8%,
extending losses after a dour 2021 economic forecast from the
European Central Bank pushed it into the red on
Thursday. The index broke a five-week winning streak, falling 1%, as
stalemate in talks between the European Union and Britain raised
chances of Britain exiting from the bloc without a trade deal.
Investors will be watching for Brexit updates with a Sunday
deadline for a last ditch attempt at a deal to govern around $1
trillion in annual trade, currently free from tariffs and
quotas. "Both the UK and the EU have started saying that not only is
a no deal outcome possible but that it's the most likely
outcome. So markets are spooked about it," said Andrea Cicione,
head of strategy at TS Lombard.
"Eventually a deal will be ironed out. If talks fail now,
the two parties will come back at the start of next year."
As European bond yields dipped, banks .SX7P continued
their slide. Spain's lender-heavy main index .IBEX dropped
1.5%, while London's FTSE 100 .FTSE fell for the first time in
nine sessions. .L GVD/EUR
Drugmaker Sanofi's SASY.PA 4% slide weighed the most,
after it said its COVID-19 vaccine candidate developed with
GlaxoSmithKline GSK.L showed an insufficient immune response
in clinical trials. GSK shares were trading 0.3% lower.
Meanwhile, as EU leaders unblocked a 1.8 trillion euro
($2.18 trillion) financial package late on Thursday, in the
United States, fiscal stimulus appeared unlikely after Democrat
House Speaker Nancy Pelosi suggested that wrangling over a
spending package could drag on through Christmas. A raft of stimulus measures since the onset of the pandemic
has lifted hopes of a global economic recovery. The STOXX 600
has risen around 45% from lows hit in March, but still remains
down more than 6% for the year.
Among other individual stocks, Rolls-Royce RR.L slumped
7.9% after it downgraded this year's cash outflow forecast and
warned the outlook remained challenging. Telecom gear maker Ericsson ERICb.ST slid after filing a
U.S. lawsuit against Samsung 005930.KS for alleged breaches in
negotiations for royalty payments and to license patents.
This could impact Ericsson's operating income by 1 billion
Swedish crowns ($118.70 million) to 1.5 billion per quarter
beginning in the first quarter 2021, the company said.
Europe's telecoms sector .SXKP dropped 2.8%, posting its
worst day in over 10 weeks.