European shares head toward first weekly loss

Frankfurt - European stocks were little changed, heading for their first weekly loss in five, as banks extended declines into a fourth day.

Scandinavian stocks dragged a gauge of lenders to the worst performance of the 19 industry groups on the Stoxx Europe 600 Index, with Nordea Bank AB, Sydbank A/S and Danske Bank A/S falling more than 4%. Assicurazioni Generali SpA pulled a measure of insurers lower, sliding 1.8% after reporting worse-than-estimated fourth-quarter net income.

The Stoxx 600 rose 0.1% to 340.85 at 10:23, heading for a weekly loss of 0.4%. Shares closed little changed yesterday, almost erasing intraday losses, as a surge in oil countered a decline in banks and exporters.

While the Federal Reserve’s signal that the pace of rate increases will be slower than initially anticipated pulled the dollar lower, benefiting commodity producers, European exporters have suffered as the stronger euro makes their goods more expensive abroad.

Amid one of the weakest earnings seasons in at least nine years and wavering faith in central banks, strategists have slashed expectations for European stocks, painting the gloomiest annual outlook in five years. The Euro Stoxx 50 Index is expected to advance 1% by the end of 2016. Only a few months ago, those same strategists were calling a 12% rally.

Berkeley Group Holdings fell 1.1% after London’s biggest homebuilder reported a drop in reservations, even as it forecast the year’s results to reach the top end of expectations. Salvatore Ferragamo SpA added 3.2% after the Italian luxury-shoe maker posted better-than-expected full- year earnings and predicted another positive year.