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Europe shares close lower as autos weigh; up 1.5% on the week

European stocks finished in negative territory on Friday as sharp losses in the autos and basic resources sectors dragged the wider benchmarks lower.

Stocks up 1.5% for the week

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FTSE
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IBEX 35
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The pan-European STOXX 600 finished 0.47 percent lower provisionally. On the week, the STOXX 600 however was up some 1.5 percent.

In European bourses, the French CAC was off 0.4 percent and the German DAX fell 0.7 percent. London's FTSE 100 slipped over 1.2 percent as miners posted sharp losses.

"It's been a rather miserable end to the week for London's equities, with the FTSE-100 on course to post its worst losing session in over a month. Losses are broad based leaving few sectors untouched, although some of the downside here arguably needs to be attributed to the recent run of strength we're seeing for the pound," Tony Cross, a market analyst at Trustnet Direct, said in a note.

Autos drag

Stocks in the autos sector underperformed, as news from Daimler and Volkswagen shook up the sector. The sector was off over 2 percent overall.

Volkswagen saw shares plummet as much as 6 percent before paring most losses. On Friday, the embattled automaker reported heavy losses for 2015. The firm reported a net loss of 1.582 billion euros ($1.77 billion) for 2015, on top of a decline in vehicle deliveries. Shares closed 1.2 percent lower.

This comes after the German firm reached a framework agreement with class action plaintiffs in U.S. court proceedings on Thursday. Reuters, citing sources, reported it was hiking its provisions to pay for the emissions scandal to 16-17 billion euros from a previous 6.7 billion euros.

Daimler saw shares sink to the bottom of Europe's benchmarks, falling 5 percent, after the automaker announced it would be conducting an investigation into its emissions testing process, upon request of the U.S. Department of Justice. Shares were also lower after its net profit fell in the first quarter.

Meanwhile Volvo jumped over 4.5 percent. This comes after the company posted a smaller-than-expected slide in first quarter earnings, and said it expected stronger demand in Europe, according to Reuters.

Oil trades higher

Oil markets saw a tick-up in later European trade, as investors tried to shake off concerns over a global supply glut. Brent and U.S. crude are currently posting strong gains, trading around $45.60 and $44.20 respectively.

Elsewhere in commodities, basic resources was one of the worst sector performers on Friday, off some 1 percent. Anglo American and Rio Tinto were both off around 2 percent, despite metal prices posting solid gains.

PMI data

On the data front, private sector activity grew in April in France, with its PMI index rising to 50.5. In Germany, manufacturing saw signs of improvement but output growth in its private sector slowed to 53.8 in April, (March 54.0). For the euro zone overall, business activity failed to show signs of picking up, as a flash composite index of services and manufacturing activity in the region, came in at 53.0, down from March's 53.1, according to Markit.

"Overall, the survey suggests that the euro-zone's economic recovery is still too slow to generate much upward pressure on inflation," said Jack Allen, European economist and Capital Economics, in a Friday note, adding that the ECB will "eventually need to do more" to boost inflation and growth.

Zodiac soars

Earnings continued to be a key market-mover on Friday with performance in luxury weighing on sentiment. Kering slumped over 5 percent after the luxury brand reported a 2.7 percent increase in first quarter revenue, but saw slower growth from its Gucci brand which failed to meet market expectations.

Merck finished up over 4 percent after a number of banking groups including Goldman Sachs, raised their price target or rating on the stock.

Zodiac Aerospace soared 11 percent, after the aerospace group said it was "not for sale" following a report that fellow rival Safran was mulling over an offer, however sources close to Safran have said this offer was "not on the agenda", Reuters reported.

U.S markets traded mostly lower on Friday, as tech earnings disappointed investors.

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