EUROPE MARKETS: Europe Stocks Waver, On Track For 3.4% Weekly Gain

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets bounced between small gains and losses on Friday, as investors took profits after strong rallies earlier in the week, while upbeat German data calmed nerves that the region's powerhouse was losing momentum.

At last check, the Stoxx Europe 600 index was flat around 271.71, after four days of gains. The index was on track for a 3.4% gain on the week.

"We have been catching up from last week and today we're seeing a little bit of profit-taking," said Predrag Dukic, senior equity sales trader at CM Capital Markets in Madrid.

"But at the moment we're not seeing too many moves. A lot of traders are under a lot of pressure because volumes are low and margins have been significantly reduced. Traders aren't really prepared to take on more risk and are waiting for this year to end," he said.

Overall trading volumes were thin as U.S. markets were slated to put in only half a trading day on the back of the Thanksgiving holiday the prior day.

Shares of Outotec Oyj jumped 6.8% after the Finnish metals-processing firm lifted its services-sales target to grow to an annual level of 1 billion euros ($1.29 billion) by the end of 2017 from a previous target of 500 million by the end of 2015.

Pointing in the other direction, shares of German supermarket retailer Metro AG lost 1.7% after Nomura cut the stock to neutral from buy. Nomura also cut the entire European supermarkets sector to neutral from bullish.

Shares of French supermarkets chain Carrefour SA lost 1.6%, while those of the U.K.'s Tesco PLC (>> Tesco Corporation) gave up 0.5%.

German Ifo beats expectations

The broader stock markets slightly trimmed losses in the morning, after the Munich-based Ifo Institute said its business-climate index rose to 101.4 in November from 100 in October, topping analysts' expectations. The surprise improvement also rallied the euro , which climbed above $1.29.

"The German economy has once again surprised us positively. There were reports that suggested otherwise, but it seems to me that the Germans are doing rather well and will surprise next year with more figures that are better than expected. This is good news for Europe," said Dukic from CM Capital Markets.

Data from France also showed business sentiment improved but remained close to its lowest level in three years. The index for business environment among industrialists rose to 88 in November from 85 in October.

Greece discussions

After the weekend, attention will return to Greece, when euro-zone finance ministers meet for the third time to agree on a road map to debt sustainability for Greece,a move necessary to release the country's next tranche of bailout money.

"At the moment, there is a logjam because the IMF (rightly) is insisting that debt sustainability can only be achieved through official sector debt forgiveness (OSI), a prospect that the northern members of the euro area are unwilling to accept at this point," analysts at RBC Capital Markets said in a note.

"But the European creditors have already demonstrated the willingness to move, and we expect a deal that will include a mix of options: lower interest rates on current loans, an interest moratorium, a longer repayment schedule or an agreement on OSI at some point in the future, conditional on Greek performance," they said.

Movers

Among notable movers in Europe, SABMiller PLC shares picked up 0.8% to £28.24, adding to a 6.4% gain on Thursday when the brewer reported a rise in net profit. On Friday, Nomura lifted the stock to neutral from reduce, while Société Générale raised its target price to £29.7 from £28.

The FTSE 100 index rose 0.1% to 5,798.45.

In Germany, banking shares posted some of the biggest losses. Commerzbank AG dropped 2.9% and Deutsche Bank AG gave up 0.3%.

Shares of Bayer AG rose 0.7% to 69.14, after Nomura raised its target price on the health-care firm to 78 from 72.

The DAX 30 Index was marginally higher at 7,246.26.

And in France, shares of oil group Total SA (>> TOTAL S.A.) dropped 0.4%, tracking oil prices lower.

France's CAC 40 index wavered around 3,498.65.

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