By Niket Nishant
Jan 16 (Reuters) - European shares took a breather on Friday as a pullback in gold prices dragged mining stocks lower, countering strength in defence names and keeping broader markets in check.
The pan-European STOXX 600 dipped 0.2% by 0922 GMT, a day after hitting a record high.
A wave of earnings updates drove risk appetite through the week, but with little fresh data due on Friday, geopolitical developments are likely to steer markets.
Mining stocks slipped 1% and were on track to end a five-session run of gains, as easing geopolitical tensions weighed on gold prices. Defence stocks, on the other hand, rose 1.3% after two consecutive sessions of losses.
The healthcare index also added 0.3%, thanks to a 3% jump in shares of Danish drugmaker Novo Nordisk.
UK's health regulator approved a higher dose of Novo's Wegovy for obesity patients. Berenberg also raised its price target on the stock.
WEEKLY STREAK INTACT DESPITE DIP
Despite Friday's pullback, the STOXX 600 was poised for its fifth consecutive week of gains, its longest winning streak since May.
"European equities aren't cheap anymore, but they're not expensive either. That said, the margin of safety that investors had previously is gone," said Michael Field, chief European equity strategist at Morningstar.
Some pockets of the market, such as the luxury industry, could be under scrutiny. The bankruptcy of high-end department store conglomerate Saks Global has raised concerns about consumer demand and competition from e-commerce.
The luxury index fell 2.1% to a three-month low.
Meanwhile, HSBC shares dipped 0.3%. The lender said it was undertaking a strategic review of its insurance business in Singapore, as part of efforts to simplify global operations.
Shares of German steel processor Kloeckner & Co gained 29%, touching their highest since June 2022, after Worthington Steel said it would buy the company in a deal valued at $2.4 billion.
ASML, the world's biggest maker of equipment used to manufacture computer chips, edged 0.5% higher a day after topping the $500 billion market value milestone, as Morgan Stanley raised its price target on the stock.
Germany's DAX index dipped 0.2% but was set for its longest streak of weekly gains since March 2024.
(Reporting by Niket Nishant in Bengaluru; Editing by Mrigank Dhaniwala and Devika Syamnath)
