EUROPEAN equities have fallen, hit by a lack of rapid progress towards full banking union at a key EU summit, and traders mindful of the 25th anniversary of the 1987 global stock market crash.
In late Friday morning deals, London's benchmark FTSE 100 index of top companies slid 0.07 per cent to 5912.79 points, Frankfurt's DAX 30 lost 0.32 per cent to 7413.68 points and the Paris CAC 40 shed 0.26 per cent to 3525.98.
Madrid's IBEX 35 sank 1.11 per cent to 8009.70 points on persistent speculation surrounding a potential bailout of Spain.
In foreign exchange deals the euro eased to $1.3053 from $1.3067 late in New York on Thursday. Gold prices slipped to $1733.85 an ounce on the London Bullion Market from $1743 an ounce.
Asian stock markets closed mixed on Friday as profit-taking set in after a week-long rally fuelled by upbeat Chinese economic data and rising hopes for the future of the eurozone, dealers said.
Wall Street closed lower on Thursday, with Google shares plunging after the internet search engine revealed a surprise drop in earnings in a prematurely-released quarterly results statement.
Also on Thursday, European Union leaders began two-days of policy talks in Brussels. By the early hours of Friday they had an agreement, of sorts, on bringing banks under bloc-wide supervision next year.
"EU leaders finally agreed to a banking union between member states, adopting a legal framework by the end of 2012 giving the European Central Bank overall control of the supervision of EU banks," said Alistair Cotton, an analyst at Currencies Direct trading group.
However, they failed to pin down an exact date - dashing hopes of a quick move towards a full banking union.
"There have not been many new revelations coming out of Brussels... the banking union might be progressing somewhat slower as expected," noted ETX Capital trader Markus Huber.
The spotlight also remained on Spain after a government official said Madrid no longer expects a recapitalisation of its ailing banks without adding to its public debt burden.
Investors remained cautious on the 25th anniversary of Black Monday, when billions of dollars was wiped off global equities in the infamous 1987 stock market meltdown.
"Twenty five years on from Black Monday and the markets are at least five times higher than they were," said Rebecca O'Keeffe, head of investment at online brokerage Interactive Investor.
"However, questions of whether a fall of the same magnitude could happen again are still being debated.
"The 23 per cent fall in the Dow on 19 October 1987 and the aftermath that week was largely caused by mass panic and everyone hitting the sell button at the same time."
Neil MacKinnon, an economist at VTB Capital financial group, said Black Monday "emphasised the intrinsic instability of financial capitalism which did not become fully obvious until the financial crisis in 2007."
"In the interim, cheap money, excess leverage and a sharp increase in securitisation created the toxic conditions for the (global financial) crisis which the debt-burdened major economies are still struggling to overcome," he told AFP.
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