Renault dropped 11.5% to become the biggest decliner on the STOXX 600, after the company cut its full-year revenue and profit forecast, the latest to suffer in an auto market downturn. The warning pushed the wider auto and auto parts index to its biggest percentage drop in two-and-a-half weeks, with added pressure from Sweden's Volvo AB forecasting a demand slump on both sides of the North Atlantic next year.

Volvo's shares settled up 2.4% after falling as much as 5% as investors chose to focus on its forecast-beating earnings. The biggest drag on the main index was an 8.4% decline the shares of Danone after the world's biggest yoghurt maker cut its 2019 sales growth, dragging Europe's food & beverage index down down 1.4%

Friday's losses pulled the STOXX 600 lower for a third straight session to end flat on a week dominated by Brexit headlines. Boris Johnson struck a Brexit deal with the European Union on Thursday, sending the benchmark index to its highest in more than a year, but concerns remain about the deal getting through the British parliament.

"Whatever happens at the weekend it is unlikely to be the end of this saga," Michael Hewson, chief market analyst at CMC Markets, said. "However, if MPs do hold their noses and vote for the deal, at least we can move on to phase 2 which is negotiating the new relationship over the next 14 month transition period." After a solid increase in the first quarter, gains in the STOXX 600 index have tapered off in the second and third. Fresh data on Friday showed China's economic growth slowed more than expected in the third quarter.

Investor focus now turns to the third-quarter earnings season, which kicks off in earnest next week. An earnings recession in Europe is expected to deepen in the third quarter, according to IBES data from Refinitiv. Thales, the largest European defence electronics company, dropped 5.4% after lowering its 2019 revenue growth forecast, but a strong report from Swedish medical technology group Getinge sent its shares jumping 16%.

London Stock Exchange rose 0.8% after reporting a higher-than-expected third-quarter income ahead of the planned shareholder vote on its deal to buy data provider Refinitiv. Shares in AMS fell nearly 5% after Bloomberg reported the Austrian sensor maker was planning to discuss a renewed bid for Osram following the failure of its first attempt. London-listed shares were dragged lower by Holiday Inn-owner InterContinental Hotels Group, which fell 4.6% after reporting a fall in third-quarter revenue per room.

Copyright Reuters, 2019