European stocks fell yesterday, recording their third straight week of losses, led by utilities, oil & gas and basic resources while banks and media pulled in the opposite direction.
Volumes were thin in the absence of US market participants due to the extended July 4 weekend.
"With US markets closed yesterday for the Independence Day holidays we have seen the major indexes lack direction," CMC Markets said in a note.
"Major stock specific stories have also been hard to come by," CMC Markets added.
The pan-European FTSEurofirst 300 index closed 0.1 per cent lower at 842.52 points. It lost 0.2 per cent over the week and has fallen 5.1 per cent since its five-month high close on June 11.
London's FTSE 100 index and the French CAC 40 both edged up 0.1 per cent yesterday while the German DAX lost 0.2 per cent and Zurich's SMI fell 0.3 per cent.
Utilities shaved most points off the index yesterday. EDF fell 4.5 per cent after Morgan Stanley downgraded its rating to "equal weight" from "overweight". UBS and Citigroup trimmed their price target on the EDF stock.
Also in the sector, E.ON dropped 1.2 per cent and GDF Suez lost 0.6 per cent.
Weaker oil and copper prices weighed on oil and gas and basic resources stocks amid renewed doubts about the outlook for economic growth triggered by weaker-than-expected US June jobs data on Thursday.
Banks added the most points, with Barclays up 2.8 per cent, Banco Santander gaining 2.2 per cent, BNP Paribas adding two per cent, HSBC rising 1.7 per cent and Deutsche Bank putting on 1.7 per cent.
Media stocks advanced after Credit Suisse upgraded the European sector to "overweight" from "underweight". The DJ Stoxx media index rose 0.5 per cent.
Wolters Kluwer jumped 4.3 per cent and Reed Elsevier climbed 3.9 per cent.
The DJ EuroSTOXX 50 index of European blue chips squeezed in a gain of 0.3 per cent to 2,376.48 points.
BayernLB chartists saw support at 2,350 points, saying in a technical analysis note that a break below that level would spark a clear "sell" signal.
Europe's top-300 index rose 35 per cent between March 9 and June 11, as improving sentiment indicators buoyed economic recovery hopes, but has traded choppily in a narrow range since.
Strategists said that picture was unlikely to change much in the week ahead.
"Next week brings too little quantitative or qualitative data to give stock markets any decisive direction," said LBBW investment analyst Michael Kohler.
Ad van Tiggelen, senior strategist at ING Investment Management, said "the road ahead will be bumpy for risky assets" such as equities, and LandesBank Berlin said stock market fundamentals remained fragile.
"We don't want to rule out further setbacks. Nonetheless, we assume that many investors will exploit an eventual temporary weakness on the market and that as a result some liquidity which has not yet been invested will flow back into the equity market again," Raiffeisen Research said.
Stefan Scheurer, capital markets analyst at Allianz Global Investors, spun on the same theme, saying investors with big cash allocations might use phases of stock market weakness to shift some money into equities.
Valuations could also lend some support. According to consensus data compiled by Goldman Sachs, European shares trade at on average 11.4 times 12-month forward earnings compared with a 10-year average of around 13.5.
The US corporate earnings reporting season gets under way next week with aluminium group Alcoa on Wednesday and oil major Chevron on Thursday.