PARIS: European shares were flat on Friday after hitting a one-week high in early trade, as rising tensions in the Middle East eroded some of the continued optimism around the European Central Bank’s hint of imminent rate cuts.

The pan-European STOXX 600 ended the session 0.1% higher, after rising as much as 1.2% during the day, but logging its second straight weekly decline.

After an early trade rally, benchmark indexes in major economies such as Germany and France closed in the red, while that of Italy and Spain closed off the day’s highs.

The euro STOXX volatility index climbed to its highest level since October, reflecting some investor anxiety.

Automobiles and travel leisure led sectoral declines, while the energy sector jumped 2.4% to its highest level since 2008 owing to higher oil prices, geopolitical risks, and global economic uncertainty.

“It all smells of geopolitical risk coming through ... now we have a much more risk-off move,” said Andreas Bruckner, European equity strategist at BofA Global Research.

Luxury giants LVMH and Richemont lost 1.2% and 3%, respectively, weighing on the STOXX 600. The broader luxury sector shed 1.3% to a near two-month low.