Europe close: Investors tread cautiously ahead of central bank meetings

European stocks fell at the end of the week amid concerns that central banks might not be as generous with their 'easy money' going forward.

The benchmark Stoxx Europe 600 index declined 1.09% to end the session at 345.52, France’s CAC 40 fell 1.12% and Germany’s DAX closed 0.95% lower.

Investors took a cautious stance heading into the weekend, ahead of what some market commentary termed as a decisive five-day stretch for monetary policy worldwide, with rate-setters at the Old Lady on Threadneedle set to meet and decide on policy, with no further easing likely at this stage.

So too, in the previous session the European Central Bank refrained from extending the duration of its asset purchase programme.

Against that backdrop, and with the start of the Fed's self-imposed 'black-out' period before its own policy decision on 21 September looming closer on the horizon, markets proved especially sensitive to somewhat hawkish Fedspeak on Friday afternoon.

In parallel, oil prices gave back a fair bit of the previous session gains when data from the US Department of Energy revealed an outsized drop in crude inventories Stateside over the latest week. However, some market chatter attributed that to the recent storms in the Gulf of Mexico.

West Texas Intermediate skidded 3.1% to end at $46.19 a barrel while Brent was 3.32% weaker at $48.38.

Chinese inflation figures were also in focus, as the country’s producer price index fell 0.8% in August from a year ago, its smallest decline since 2012.

German trade data from Destatis did little to lift the mood on Friday, as it showed the country’s trade surplus was lower than expected in July as exports slid.

Adjusted for seasonal swings, the trade surplus declined to €19.4bn from a revised €21.4bn in June. Economists had been expecting a surplus of €22bn.

Exports fell 2.6% on the month, which was the worst decline in almost a year and missed expectations of a 0.3% increase.

Meanwhile, imports declined 0.7% on the month, missing forecasts of a 0.8% jump.

Together with the latest Spanish and French industrial production figures, the German data led BNP Paribas Matthias Thiel's to describe the start of the third quarter in the Eurozone as "fairly poor".

On the corporate front, Monte Paschi di Siena ended lower after Fabrizio Viola, the chief executive of the world’s oldest bank, resigned.

Pub companies were in focus in London. JD Wetherspoon rallied after posting a 12.5% jump in full-year pre-tax profit to £66m. It was a different picture for Greene King, however, whose shares slid after it reported a strong start to the year but sounded a cautious note on the impact of the Brexit vote.

Luxury retailer Burberry was under pressure after Goldman Sachs removed the stock from its Sustain Focus List, highlighting the company’s subdued outlook.