(Reuters) - European shares were little changed on Friday as drugmakers came under pressure on worries the U.S. government may intervene over high drug prices, while Federal Reserve chairman Jerome Powell’s dovish comments helped limit losses.
The pan-European STOXX 600 index ended flat but broke a five-week winning streak as regional equities failed to take advantage of the Fed’s accommodative stance this week.
European drugmakers have weighed on the healthcare index .SXDP since Thursday after the White House scrapped an ambitious health rebate plan and raised the possibility of U.S. lawmakers intervening on high drug prices.
Auto stocks .SXAP recovered from the previous session to close nearly 1% higher, although Daimler (DAIGn.DE) underperformed after the world’s largest truckmaker warned investors it expected to swing to a second-quarter loss.
“It’s highly indicative of what is happening on trade over the last couple of months,” said Stefan Koopman, senior market economist at Rabobank in Utrecht, Netherlands.
“We’ve seen carmakers have difficulty, with Chinese car sales dropping over the past 6 to 12 months.”
Chemicals .SX4P made the biggest gains with Swiss specialist EMS-Chemie (EMSN.S) closing 5% higher on good first-half results. However, it warned that the trade conflict between major powers caused considerable uncertainty among consumers and companies.
The warning came days after German chemical giant BASF .BASFn.DE highlighted the repercussions of the protracted trade war between the United States and China, especially the toll it was likely to take on the agricultural and auto sectors.
In contrast to world stocks, European shares had a tepid week, although they have regained their footing after a huge sell-off in May due to an escalation in U.S.-China trade tensions and expectations of rate cuts by major central banks.
Volumes on the STOXX 600 index were well-below long-term averages on Friday as investors braced for next week’s earnings deluge.
Companies listed on the pan-European STOXX 600 index are expected to report 0.8% earnings growth in the second quarter, down sharply from an estimate of 1.8% a week ago, according to data from I/B/E/S Refinitiv on Tuesday.
Reporting by Agamoni Ghosh and Susan Mathew in Bengaluru; Editing by Arun Koyyur and Kirsten Donovan