Stocks ended lower on Friday, as the euro continued to surge in a light day for macroeconomic news causing the weakness in European equities to spread to London.



The FTSE 100 index closed down 0.5%, or 34.96 points, at 7,452.91, but ended 1.0% higher for the week as a whole. The FTSE 250 ended down 0.1%, or 12.70 points, at 19,751.24, ending the week up 1.8%, and the AIM All-Share closed up 0.2%, or 1.91 points, at 969.50, closing 1.6% higher for the week.



The BATS UK 100 ended down 0.4% at 12,653.41, the BATS 250 closed down 0.1% at 17,947.98, and the BATS Small Companies ended flat at 12,106.87.



The pound was quoted at USD1.2959 at the London equities close, compared to USD1.2999 at the same time on Thursday.



The euro continued to surge, rising further after breaking through a one-year high against the greenback on Thursday. The euro stood at USD1.1651 at the European equities close, against USD1.1644 the prior day.



Stocks in mainland Europe struggled with the strength in the single currency, as the CAC 40 in Paris ended down 1.6% while the DAX 30 in Frankfurt ended 1.7% lower.



"After a relatively subdued morning session, equity markets in Europe drifted further and further into the red, as the strong euro took its toll on Continental markets. The FTSE 100 isn't fairing too badly in comparison with its eurozone equivalents, as the strength of the single currency is crippling them," said CMC Markets analyst David Madden.



"The fear the European Central Bank will discuss the possibility of trimming its bond buying scheme later this year has driven investors to dump their eurozone equities. To make matters worse, the relative strength of the euro is making eurozone stocks more expensive," Madden added.



The ECB left key interest rates and massive stimulus unchanged for an eleventh straight month on Thursday and also left the forward guidance intact. However, President Mario Draghi's comment that discussions over quantitative easing will take place in the autumn led investors to focus on potential tapering of the financial stimulus programme.



Back in London, Convatec Group was among a small group of gainers in the blue-chip index, closing up 1.9%, as it recovered losses incurred on Thursday when it ended 0.6% lower. On Thursday, the medical products company revealed it will acquire US-based incontinence-related products distributor Woodbury Holdings for USD120.5 million.



British American Tobacco closed 0.9% higher, after adding three non-executive directors to its board that were nominated by Reynolds American Inc as part of BAT's acquisition of its US peer.



BAT agreed to buy the remaining 57.8% of Reynolds it didn't already own for USD49.00 billion back in January, in a deal that will create the largest tobacco company in the world by market capitalisation.



Following shareholder and regulatory approval, Reynolds has now nominated directors to join the BAT board, namely Lionel Nowell, Holly Koeppel and Luc Jorbin.



At the other end of the FTSE 100 was Paddy Power Betfair, the worst performer, down 3.3%, after Investec issued a double downgrade on the bookmaker's shares to Sell from Buy.



In the FTSE 250, Paysafe Group closed up 6.8% at 578.79 pence to end as the best performer, having hit a record high of 591.50p at the open. Paysafe has received a preliminary, conditional takeover proposal from funds managed by Blackstone and funds managed by CVC Capital Partners after being initially approached in May.



Following the receipt of a number of indicative proposals from the funds that were rejected, Paysafe said due diligence access was granted on the basis of a possible offer of 590.00 pence per share to be paid in cash, valuing the business at GBP2.9 billion.



In a separate statement, Paysafe said it has agreed to acquire Delta Card Services, the holding company for Merchants' Choice Payment Solutions, a payment processor based in Shenandoah, Texas, for a total of USD470.0 million in cash using debt and existing resources.



Acacia Mining sank and was by far the worst mid-cap performer, as shares closed down 17% and at their lowest level since February 2016.



The miner scrapped its interim dividend after reporting negative cashflow in the first half of 2017 following the ban of concentrate exports out of Tanzania. Exports account for around 30% of Acacia's annual revenue and the company said it lost around USD175 million of revenue in the six-month period as a result of the "complex and fluid situation".



Gold rose on the uncertainty in global equities to reach its highest level since late June, with an ounce of the precious metal quoted at USD1,250.78 at the London equities close against USD1,246.30 the same time Thursday.



Brent oil lost ground and was quoted at USD48.62 a barrel at the close from USD49.56 at the same time the prior day. The Baker Hughes US oil rig count is still to come at 1800 BST.



In economic news, the UK budget deficit increased in June, data from the Office for National Statistics showed early Friday. Public sector net borrowing excluding interventions increased by GBP2.0 billion from the previous year to GBP6.9 billion in June. The expected level was GBP4.9 billion. In the current financial year-to-date, public sector net borrowing grew by GBP1.9 billion to GBP22.8 billion.



Of this GBP22.8 billion of public sector net borrowing, GBP17.1 billion related to the cost of the "day-to-day" activities of the public sector, while GBP5.7 billion related to capital spending such as infrastructure. Public sector net debt totalled GBP1,753.5 billion at the end of June 2017, equivalent to 87.4% of gross domestic product.



Elsewhere, the eurozone economy is forecast to expand at a faster-than-expected pace, according to the Survey of Professional Forecasters published by the European Central Bank. Respondents lifted their growth outlook to 1.9% from 1.7% for 2017, to 1.8% from 1.6% for 2018, and to 1.6% from 1.5% for 2019.



At the same time, inflation projections for 2017, 2018 and 2019 were revised down by 0.1 percentage points each. For 2017, the respondents forecast 1.5% inflation, 1.4% for 2018 and 1.6% for 2019.



Unemployment rate expectations continued to show a declining trajectory. The average point forecasts were 9.2%, 8.8% and 8.4% for 2017, 2018 and 2019, respectively.



The UK government showed signs that it is planning on making its intentions on Brexit negotiations clearer following calls from the European Union's chief negotiator Michel Barnier that there needed to be "clarification" on Britain's position on a number of issues, predominantly citizen rights and the settling of accounts.



At a press conference on Thursday, following the second round of negotiations between the UK and the EU, Barnier said there had been some areas of agreement about how Britons living abroad and EU nationals living in the UK should be treated after Brexit. But he said Brussels believes citizens' rights should be backed by the Court of Justice of the European Union, and also warned Britain all accounts "must be settled" when it quits the bloc.



A report in The Times on Friday said Prime Minister Theresa May is ready to offer free movement for two years under a plan drawn up by Chancellor Philip Hammond, while the Guardian quoted "a senior Cabinet source" as saying that the period could last for three or even four years.



There was no immediate response from Downing Street to the reports about allowing free movement to continue past March 29, 2019, when the UK will formally leave the EU, but May did stress her backing for an implementation period when speaking with business leaders who attended the first of a series of quarterly Downing Street forums on Brexit.



The meeting was attended by business bodies including the CBI, Institute of Directors and British Chambers of Commerce, as well as major companies considered most likely to be affected by EU withdrawal, including Jaguar LandRover, BAE Systems, Unilever and Tesco.



"The prime minister reiterated that the government's overarching goal is for a smooth, orderly exit culminating in a comprehensive free trade deal with the EU, with a period of implementation in order to avoid any cliff-edges," said a Downing Street spokesman.



The next round of Brexit negotiations are penciled in to start the week commencing August 28.



Stocks in New York were trading lower at the London equities close. The DJIA was down 0.3%, the S&P 500 index was down 0.2% and the Nasdaq Composite was trading 0.3% lower.



"With the weekend looming we were unlikely to see any major shift in narrative, and the dollar weakness that has been such a feature of the previous few days has persisted today; clearly the Washington turmoil continues to weigh on the greenback. All the promises of the early days of the Trump administration have crumbled to dust, with no healthcare reform, tax cuts or infrastructure stimulus on the horizon," said IG analyst Chris Beauchamp.



The economic calendar on Monday is focused on Markit services and manufacturing PMIs for France at 0800 BST, Germany at 0830 BST, the Eurozone at 0900 BST and the US at 1445 BST. US existing home sales is at 1500 BST.



The corporate calendar on Monday includes first-half results from consumer goods giant Reckitt Benckiser, B2B media and events company Ascential and Temple BarInvestment Trust while Ryanair Holdings and food producer Cranswick are due to publish first-quarter results.