Europe's benchmark index dropped on Friday, retreating from the edge of a record high as a selloff in US technology stocks weighed on global gauges.

The Stoxx Europe 600 declined 0.5%, reversing earlier gains. The index ended the session within just over 1% of its November closing record. Travel and leisure as well as utilities stocks outperformed, while banks and basic resources led declines.

UBS Group AG shares rose 2.5% to the highest level since 2008, after a group of center-right Swiss lawmakers proposed a compromise solution in the debate over the group's capital levels, which centers on allowing the bank to use more convertible bonds to meet its higher future requirement.

Gilles Guibout, head of European equities at AXA IM, said that with most economists betting on improving European growth, "that should mean double-digit earnings growth in 2026, and no reason to be bearish."

Sportswear stocks were higher after Lululemon Athletica shares jumped as the yoga-wear maker boosted its full-year outlook. Adidas AG rose 2.0% and Puma SE added 3.2%.

The Stoxx Europe 600 Index is expected to rise about 7% by the end of next year, reaching 620 points, according to the median forecast in a Bloomberg survey of 17 strategists. The last time forecasters were this uniformly bullish was 2018, when the Stoxx 600 plunged 13%.

"Everyone is convincing themselves that there will be a Christmas rally, so it looks like there will be one," said Karen Georges, a fund manager at Ecofi Investissements in Paris. "Investors are keen to buy this year's laggards, it's a good time to diversify your portfolio at the moment."

Source : Bloomberg