European shares down on virus worries

European shares slipped on Friday, setting up to end an actionpacked week on a somber note on worries over the economic impact of a resurgent COVID-19 pandemic and the fate of a Brexit trade deal as well as stalled U.S. stimulus measures.

The pan-European STOXX 600 index slid 0.8%, extending losses after a dour 2021 economic forecast from the European Central Bank had seen it end in the red on Thursday. The index is set to break a five-week winning streak as a stalemate in talks between the European Union and Britain raised the chances of Britain’s exit from the economic bloc without a trade deal. Investors will be watching for Brexit updates with a Sunday deadline for a last ditch attempt at a deal.

Drugmaker Sanofi’s 3.1% slide weighed the most, after it said its COVID-19 vaccine candidate developed with GlaxoSmithKline showed an insufficient immune response in clinical trials. GSK shares were trading flat.

European Union leaders unblocked a 1.8 trillion euro financial package late on Thursday to help the economy recover from the pandemic-induced recession.

A raft of stimulus measures since the onset of the pandemic has lifted sentiment on hopes of a global economic recovery. The STOXX 600 has risen 45% since lows hit in March, but it remains more than 6% down for the year.

Among other individual stocks, Rolls-Royce slumped 5.3% after the engineering company downgraded this year’s cash outflow forecast and warned the outlook remained challenging. Telecom gear maker Ericsson fell to the bottom of the STOXX 600 after filing a U.S. lawsuit against Samsung for alleged breaches in negotiations for royalty payments and to license patents. This could impact Ericsson’s operating income by 1 billion Swedish crowns ($118.70 million) to 1.5 billion per quarter beginning in the first quarter 2021, the company said. Europe’s telecoms sector dropped 2.3% and was on course for its worst day in over 10 weeks.