European markets were mixed in early Friday trading amid a pause in the global equity market rally and a slumping U.S. dollar that helped shares in Asia to their best weekly gain in more than six months.
Britain's FTSE 100 was little-changed from its record high close on Thursday, although banks and financial stocks led Friday's leaders and offset some profit-taking for the mining and materials sector. An early mover of note in pharma stocks, however, was AstraZeneca Plc (AZN - Get Report) ,which fell 0.5% to 4,840.77 pence each after it received a second "complete response letter" from the U.S. Food & Drug Administration regarding its ZS-9 Hyperkalaemia treatment, putting the drug's approval process in the United States in doubt.
Germany's DAX was marked 0.2% lower by 09:30 GMT as the index was held down by a slide in European carmakers, which fell across the board after Germany's Economy Minister warned of a potential legal challenge to U.S. President Donald Trump's border tax plans ahead of a meeting with Angela Merkel in Washington.
The Stoxx 600 Europe Automobiles and Parts Index was quoted 1.4% lower in the opening hour of trading, with marked declines seen for German automakers Volkswagen AG (VLKAY) , BMW (BMWYY) and Daimler (DDAIY) . In Paris, Europe's second-biggest carmaker, PSA Peugeot (PUGOY) , was trading 1.9% lower while domestic rival Renault (RNLSY) extended its declines by a further 0.91% amidst a storm of allegations related to diesel emissions cheating.
Economy Minister Brigitte Zypries told Germany's' Deutschlandfunk radio that Trump's aim to apply a 35% tax on cars manufactured in Mexico and imported into the United States could elicit a reaction from the German government via the World Trade Organisation.
Currency markets were also active, with the single currency rising to a 5-week high of 1.0782 against the U.S. dollar after European Central Bank Governing Council member Ewald Nowotny of Austria told a German newspaper that the Bank could consider a move on its deposit facility -- which sits at -0.4% -- before it made any changes to its key 0% refinancing rate.
Overnight in Asia, investors were largely trading on the market reaction to Wednesday's rate hike and dovish interest rate outlook from the U.S. Federal Reserve. With Fed chair Janet Yellen essentially guiding for fewer interest rate increases than investors had anticipated, much of the market's ire was directed to the U.S. dollar index, which fell to 99.97, the lowest since Feb. 6, and remained there during early European dealing.
The dollar's renewed slide helped Asia stocks to another session of solid gains, with the MSCI ex-Japan index rising 0.24% by 07:00 GMT, on track for a weekly gain of around 3.5%. Japan's Nikkei 225, however, was once again held down by a firm yen and closed the session 0.35% lower at 19, 521.99 points, wiping out all of the week's modest advance.
Global oil prices edged higher in Asia trade, but mostly tracked the fading dollar, with WTI prices rising 0.15% to $48.85 per barrel and Brent contracts for May delivery 6 cents per barrel higher at $51.80 per barrel.
U.S. equity futures prices, which initially pointed to a modest Friday pullback on Wall Street, are now suggesting a flat open for the Dow Jones Industrial Average and the broader S&P 500.