European stock markets fell on Thursday as investors pulled back from risk stocks and piled into defensive holdings. The so-called Trump trade appeared to fade.
The FTSE 100 in London was the only exception, closing up by 0.03% at 7,292, marking yet another record for the index. Gains for gold miners and reporting companies helped to offset some of the weakness in other areas.
In France, the CAC 40 closed down by 0.5% at 4,863, with auto firms proving the primary weight around the ankles of the index.
The DAX in Germany was Europe's largest major faller, down 1.1% to 11,521, as banks and auto firms weighed on the results.
European currencies were modestly higher against the greenback, with sterling recovering to 1.2209 by the close of stock markets, and the euro gaining nearly 200 points to 1.0661.
Both currencies benefited from President-elect Donald Trump's news conference and the controversy over his alleged relationship with Russia, which appears to have distracted both the incoming president as well as markets.
However, the euro received a boost in the early hours after minutes from the European Central Bank showed divisions over the length of time at which the bank should hold policy at its current loose levels. Added to this were complaints about the inflation outlook from the German finance minister, who once again criticized the ECB's stance.
Initially the weakness of autos in Europe was a function of a risk-off approach across markets, although sentiment later deteriorated when it emerged that the Environmental Protection Agency has filed a notice of violation with Fiat Chrysler Automobiles (FCAU) - Get Report alleging that some of its cars have a defeat device to violate emissions standards. FCA stock slumped close to 20% during the session.
In France, automakers were also weaker, with Renault (RNSDF) and Peugeot (PEUGF) both featuring highly on the list of fallers, down more than 2% each. ArcelorMittal (MT) - Get Report was the top faller on the CAC, down by more than 3%.
In the U.K. FTSE 100 risers included utility National Grid (NGG) - Get Report and consumer drugs firm Reckitt Benckiser (RBGLY) , which were both up by around 1%. Gold miners were also prominent risers, with Randgold (GOLD) - Get Report and Fresnillo (FNLPF) up by around 3%.