MILAN: European shares lost ground on Friday, with satellite company Eutelsat plunging 30 percent after slashing its outlook, while weak oil prices also weighed on the region's stock markets.
The pan-European FTSEurofirst 300 index fell 0.3 percent, while the euro zone's blue-chip Euro STOXX 50 index fell 0.2 percent.
European markets have sagged in recent weeks, with some investors blaming strength in the euro and uncertainty before Britain's vote on June 23 on European Union membership - dubbed "Brexit" - and a political stalemate in Spain.
The International Monetary Fund (IMF) reiterated on Friday that a vote by Britain to leave the EU next month could hit the global economy and world stock markets.
"We're quite cautious about the European market even though valuations are not expensive. Before taking big bets, investors need to know what will happen on the political front and where the euro will go," said Matteo Ramenghi, Chief Investment Officer at UBS WM Italy.
Oil prices also retreated, weighing on the shares of BP and Total. Eutelsat's 30 percent fall made it the worst stock in the region. The satellite company cut its outlook for the full year late on Thursday and was met with a spate of ratings downgrades on Friday.
"Such a heavy hit to forecasts, coming from across the applications, will knock confidence in the story," Barclays said in a note, downgrading the stock to "equal-weight" from "overweight" and slashing its target to 22 euros from 31 euros.
However, French video games maker Ubisoft rose 7.6 percent after it reported higher sales and issued a bullish outlook.
The FTSEurofirst is down around 10 percent so far in 2016.
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