Linde surge helps European shares end flat amid rising coronavirus fears
London's blue chip index significantly underperformed, down 1.1% as a rallying pound hit its internationally exposed companies, while utility Centrica plunged 15% on reporting a 35% drop in 2019 profit.
The sterling surged 0.7% amid strong expectations that the appointment of a new British finance minister will pave the way for a more expansionary budget next month.
After trading lower in the session the pan-European STOXX 600 index finished flat as the World Health Organization said cases of coronavirus infections are not rising dramatically outside China, calming some jitters.
The index notched new highs in the last two sessions on optimism over what appeared to be a decline in new cases of infection, as well as a slow restart in factory activity after an extended break in China.
But a dramatic jump in new cases after China deployed a new diagnostic method, and a record rise in the death toll, dashed those hopes and swiftly subdued risk appetite. HSBC lowered its first-quarter forecast for mainland China's economic growth on Thursday.
While the new charts of infection rates look much more worrying, the number of recoveries is also on the rise, providing some hope that the situation is still moving in the right direction, said Chris Beauchamp, chief market analyst at IG.
Auto stocks slid 0.8% after data showed auto sales in China likely fell 18% in January, their 19th straight month of decline, with the virus outbreak further hurting demand.
Nestle SA, the biggest firm on the STOXX 600 by market capitalization, dropped 2.2% after it pushed back its 2020 growth target to over the next two years.
Among bright spots were German shares of industrial gases group Linde which rose 3.2% after it said it aims for further profit gain in 2020. Its rise helped Germany's China-sensitive DAX wipe most of the session's losses.
European real estate <.SX86P>, utility <.SX6P> and healthcare sectors benefited from some defensive buying.
Italian shares managed to weather the rout as Telecom Italia surged after on expectations for M&A moves on its network, while payment firm Nexi jumped on multiple price target hikes after strong earnings.
By Susan Mathew