By Anastasiia Kozlova and Purvi Agarwal
(Reuters) -European shares inched lower on Friday, but were poised for their fifth consecutive month of gains, as rising bets of a U.S. interest rate cut and some
progress on a Russia-Ukraine ceasefire lifted investor sentiment this week.
The pan-European STOXX 600 was down 0.1% at 574.32 at 0943 GMT, though on track for its best weekly showing since early October. It is also set for the longest monthly winning streak since March 2024.
Major regional bourses in Germany and France lost 0.1% each.
European banks were the biggest drag on the index, which is down 0.2%. Italy's Monte dei Paschi di Siena (MPS) fell 2.2% as the bank is facing an investigation in Milan, related to its takeover of Mediobanca.
The sector has climbed nearly 4% this week, and is set for its best weekly performance since early August, as investors piled into the stocks amid concerns over tech valuations that drove a global sell-off this month.
Commodity-linked stocks gained, with energy and stocks and miners up 0.3% each, tracking higher oil and metal prices.
Investors refrained from making major bets heading into the weekend, with a holiday-shortened U.S. market session on Friday.
"There is a little bit of a breather, a little bit of a lack of any kind of catalyst in Europe, so markets are welcoming a sense of calm," said Benjamin Jones, global head of research at Invesco.
"A lack of news flow in some ways can be quite a welcome relief for many of us in the markets at the moment."
As November draws to a close, concerns about an AI-driven market bubble have eased, with investors focusing on the growing likelihood of a Federal Reserve rate cut next month instead, after dovish comments from policymakers and weak economic data.
Next week, investors expect the focus to shift toward Russia-Ukraine peace talks. Ukraine has signalled support for a deal framework in a meeting with the U.S., but said key issues must be resolved.
Among individual stocks, Delivery Hero shares jumped 8.2% after a report said investors were pushing management to consider a sale of the company or divest parts of the business.
Ferragamo gained as much as 5.2% after JP Morgan upgraded it to "neutral", citing improved brand momentum for the Italian luxury group.
Markets are also awaiting the resolution of a trading outage at CME Group that has temporarily halted activity on key currency and futures platforms and dampened momentum.
(Reporting by Anastasiia Kozlova and Purvi Agarwal; Editing by Sonia Cheema and Shinjini Ganguli)
