LONDON/MILAN: European shares fell to a two-week low on Friday, with Lufthansa dropping after the surprise departure of its chief financial officer, while persistent political concerns put pressure on cyclical stocks on the last trading day of the week.
Investors are jittery ahead of a June 23 referendum on British membership of the European Union. Though bookmakers' odds point towards a vote to remain, polls suggest a neck-to-neck race.
"The upcoming UK referendum on the EU in less than two weeks, continuing slow growth within the EU and rallying oil prices seem to be taking a toll on European stocks," City of London Markets trader Markus Huber said.
"With the European football championship kicking off in France and the country being on high alert for possible terror attacks, traders in general might prefer temporarily to reduce or at least hold steady their exposure to Europe for now."
As caution ahead of the Brexit vote mounts, European equity funds posted a net outflow for the 18th consecutive week, a run not seen since February 2008, before the onslaught of the global financial crisis, Bank of America Merrill Lynch said in a note.
The pan-European FTSEurofirst 300 index was down 1.7 percent by 1043 GMT, trading at its lowest intraday point since May 24.
The index is down 1 percent so far this week, its second straight week of losses.
Lufthansa shares fell more than 5 percent after news that CFO Simone Menne is to step down, a surprise move that came as the airline is trying to trim its cost base.
UniCredit fell more than 4 percent after its chairman said a new CEO to replace outgoing Federico Ghizzoni would not be chosen before the end of July.
Investors have been concerned the Italian bank may turn to a capital increase to beef up its finance and uncertainty over strategy is likely to continue until a new CEO is picked.
Cyclicals were hit hard, with European insurance, banking, construction and travel indexes falling between 1.7 percent and 2.4 percent.
Commodities stocks also fell, with the energy index down 1.3 percent and the mining index dropping 1.7 percent after prices of crude oil and industrial metals fell.
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