European shares steadied on Friday amid fresh tensions over North Korea but remained near recent highs ahead of this weekend's general election in Germany, where conservative Chancellor Angela Merkel is expected to win a fourth term.
L'Oreal was one of the few bright spots on market talk about possible ownership changes at the cosmetics giant.
Traders said her death could fuel talk that Nestle could consider selling its stake in L'Oreal, which in turn may look at selling its holding in Sanofi. Both
The pan-European STOXX 600 index fell 0.1 per cent by 0805 GMT. Miners were the biggest sectoral faller, down 1.4 per cent, as escalating tensions on the Korean peninsula and China's rating downgrade hit metal prices.
North Korea said on Friday it might test a hydrogen bomb over the Pacific Ocean after US President Donald Trump vowed to destroy the reclusive country.
Among top fallers on the STOXX were London-listed miners BHP Billiton, Anglo American and Glencore, which dragged UK's FTSE down 0.2 per cent.
Germany's blue chip DAX index was little changed, close to a two-month high on the last trading day before the general election in Europe's biggest economy.
The DAX has outperformed euro zone peers over the past four years to hit a record high in June and there are expectations that a victory of Merkel could further support the country's equities, regardless of the makeup of her coalition.
Yet some investors believe that German stocks, especially industrials like carmakers, are too highly priced and could be severely hit by a possible correction in key export market China on the back of a growing pile of debt.
“The risks in a lot of the German companies are being under appreciated,” Luiz Sauerbronn, who helps manage $30 billion at global investment advisory firm Brandes Investment Partners.
Sauerbronn however said he was more optimistic about prospects for European equities as a whole given their attractive relative valuations versus the US and sees opportunities in British grocers or European oil companies.
Among German blue chips, utilities RWE and E.ON , which are seen sensitive to possible policy changes in their country following the vote, rose 0.7 and 0.6 per cent.
Among other top movers on Friday was British engineer Smiths Group Plc. Its shares fell 3.9 per cent after full-year revenue growth fell short of analyst expectations even though its pretax profit rose 17 per cent helped by growth in its security scanners business.