European shares fall amid Greek impasse, weak eurozone data

European shares fell on Friday, setting them on course for a weekly loss, as investors were unnerved by conflicting signals from Greece's debt talks and data showing private loan growth in the euro zone stalled last month. The pan-European FTSEurofirst 300 closed down 1.8 percent at 1,586.30 points, while the Euro STOXX 50 index of top European shares shed 2.2 percent. On national stock markets, France's CAC lost 2.5 percent and Germany's DAX 2.3 percent. Athens' benchmark share index fell 1.4 percent.
Leading the losses, Airbus Group fell 4.1 percent. Traders cited comments by the company's strategy chief Marwan Lahoud, who said analysis of the crashed Airbus A400M black box revealed quality problems in final assembly. The FTSEurofirst lost two percent in a week marked by uncertainty surrounding Greece's negotiations with its international lenders ahead of a payment deadline for Athens looming next week.
Greece's government intends to reach an agreement on a cash-for-reforms deal by Sunday, its spokesman said on Thursday, even as euro zone officials suggested a deal was far from imminent. The lack of clarity on the outcome meant some traders were reluctant to make strong bets on future market directions. "It's just Greece, Greece and Greece," David Madden, a market analyst at IG, said. "The lack of news in either direction tells you why traders are sitting on their hands."
European indexes extended losses after data showed euro zone private sector loans stopped rising in April. "The lending data shows a lack of risk attitude among businesses," said Brenda Kelly, head analyst at London Capital Group. Despite the losses suffered this week, the pan-European index is still up around 0.7 percent for the month, with some investors seeing grounds for optimism.
"We are overweight euro zone equities. What we like is that the economic cycle is kicking in," said Mads Pedersen, head of global asset allocation at UBS Wealth Management in Zurich. "We have had lots of stimulus, and we think in the next 6-12 months earnings growth will kick in stronger." Associated British Foods was among the biggest gainers of the day, adding 2.6 percent to reach two-month highs after Goldman Sachs ramped up its rating to "buy" from "sell". Mergers & acquisition speculation boosted Swiss agrochemicals company Syngenta, which was building up defenses for a possible higher bid from US peer Monsanto , according to a Bloomberg report. Syngenta shares closed up 0.5 percent.