Healthcare and utilities were the only other sectors in the green.
Conversely, travel and leisure stocks led broader declines and finished 2.3 per cent lower, taking a hit from the soaring oil prices.
โWhen the main channel is through energy prices, you see some risk aversion and thatโs what weโre seeing across European equities and that explains the subdued performance,โ said Lilian Chovin, head of asset allocation at Coutts, referring to the Middle East tensions.
Unpredictable policies
European central bank decisions this week showed how Trumpโs unpredictable trade policies are complicating monetary policy.
The Bank of England kept rates on hold, as expected, but flagged risks from a weaker labour market and higher energy prices.
Britainโs FTSE 100, which houses energy giants such as BP and Shell, lost 0.6 per cent.
The Swiss National Bank cut rates to zero as expected, while Norwayโs central bank delivered a surprise 25 basis-point cut, its first reduction in five years.
Stocks in Oslo were up 0.7 per cent.
The Euro STOXX Volatility index touched its highest level since May 23 and was at 24.94.
Fed Chair Jerome Powell said on Wednesday that inflation in goods prices is expected to go up over the summer as Trumpโs tariffs work their way to consumers.
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The mixed signals did not offer markets much clarity on how the Fed plans to navigate the uncertain economic environment.
EU officials are increasingly resigned to a 10 per cent rate on โreciprocalโ tariffs being the baseline in any trade deal between the United States and the EU, five sources familiar with the negotiations said.
โWe understand Trumpโs reaction function and the constraints that apply to him and so investors are better able to form forward-looking views compared to two months ago,โ Chovin added.
Shares in recruitment companies in Europe slid after British recruiter Haysโ forecast a more than 57 per cent drop in annual operating profit.
Rival firms Randstad RAND.AS, Robert Walters and Adecco fell over 4.5 per cent each.
Among stocks, Stora Enso jumped 14.7 per cent to top the STOXX 600 after the Finnish forestry group said it was initiating a strategic review of its Swedish forest assets.
Reuters
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