European shares traded lower on Friday across most exchanges and sectors, failing to get support from subdued sessions in Asia and on Wall Street, and as the euro's rally dims appetite for regional stocks.

At 0830 GMT, the German blue chip DAX index was down 0.2 per cent, France's CAC 0.4 per cent, London's FTSE 0.3 per cent, and Milan's FTSE MIB 0.4 per cent. The broader pan-European STOXX 600 benchmark was down 0.3 per cent.

After suffering four straight sessions in the red, European banks were slightly higher, with the sectoral index up 0.3 per cent.

Banking sector's lending business benefits from higher interest rates and investors fear the European Central Bank might delay monetary policy tightening if the euro keeps on strengthening against the dollar.

Spain's Banco Santander and Caixbank, France's Natixis and Britain's Barclays posted the strongest gains, between 1.1 and 1.7 per cent.

For Laurent Gaetani, head of Degroof Petercam Gestion, the weakening of some banks' share price presents an opportunity to buy on the dip.

“These are entry points,” the French asset manager told Reuters, adding he was “overweight” on the sector.

Insurers AXA and Allianz, for which Barclays raised its target price, also rose 0.3 and 0.4 per cent, respectively.

Elsewhere, shares in British pub operator Greene King fell 14 per cent after a weak sales update and French fuel storage company Rubis were down 4.8 per cent after its first half results.

Another big faller was France's Hermes International whose shares fell 4.5 per cent. The luxury group had been expected to join the CAC 40 index but STMicroelectronics , up 1.2 per cent, was admitted instead.

Akzo Nobel lost 2.1 per cent after it issued a profit warning and announced a revamp that will include the chief financial officer stepping aside and a shake-up to its paints and industrial coatings businesses.

In the automobile sector, Volkswagen was up 0.7 per cent after reports it was actively working on deals to sell non-core assets accounting for as much as 20 per cent of the German carmaker's annual revenues.

Its French counter part Peugeot had a rougher morning and was down 1.8 per cent after Exane BNP Paribas cut its target price by 4 percent and its rating to “underperform” from "neutral".

Related Topics