European stock markets slid Friday at the end of another volatile week for investors, closely tracking US lawmakers' failure to strike a new stimulus deal and surging virus infections that are prompting fresh containment measures.
Europe's indices retreated following a steadier showing in Asia and Thursday on Wall Street.
The dollar climbed against its main rivals, while oil prices dropped.
"Some positive headlines around a US stimulus deal and vaccine news may be supportive of risk today but sentiment is fragile, and it's been a turbulent week," noted Neil Wilson, chief market analyst at Markets.com.
The need for a new stimulus deal was again highlighted by data - this time showing US jobless claims came in more than expected last week as the recovery in the world's top economy stutters owing to a pick-up in new virus cases.
Aneta Markowska at Jefferies LLC said it was "a close call" on whether a new stimulus would be agreed, adding:
"While still possible, there is a high risk that it does not happen this year. Without it, we would expect the economy to hit a major speed bump in the fourth quarter."
It comes amid a surge in coronavirus infections in several countries that have seen governments impose partial lockdowns and social distancing measures, and shorten opening times for bars and restaurants.
The moves have sparked concerns of another painful hit to the economy.
"At this point in the recovery, a return to the Covid-19 abyss due to stricter lockdown measures is quite frankly something the global economy cannot afford," said Stephen Innes at AxiCorp.
