European stocks on course for first weekly drop in eight, Allfunds jumps in debut

Spanish fund distribution firm Allfunds jumped over 18% in its first day of trading, boosting an IPO market dented by last month's underwhelming Deliveroo listing. Mercedes-Benz car maker Daimler AG inched up 0.3% after raising its profit outlook for 2021, while luxury puffer jacket maker Moncler fell 6.6% after reporting first-quarter sales that were a touch lower than the year-earlier quarter.

European stocks were on track for their first weekly loss in eight on Friday as a surge in global coronavirus cases offset optimism about a strong earnings season, while Madrid-based Allfunds jumped in its Amsterdam market debut. The pan-European STOXX 600 slipped 0.2% and was on course for a 0.8% weekly drop.

Global market sentiment was hit following reports on Thursday that U.S. President Joe Biden planned to raise income taxes on the wealthy, a proposal some said would be hard to pass in Congress. Meanwhile, India reported the world's highest daily tally of coronavirus cases for a second day and Japan was set to declare "short and powerful" states of emergency for Tokyo, Osaka and two other prefectures as the country struggles to contain a resurgent pandemic.

"We've fears of a third wave of infection in many parts of the world. That is going to keep acting as a drag on how far indexes will grow," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Spanish fund distribution firm Allfunds jumped over 18% in its first day of trading, boosting an IPO market dented by last month's underwhelming Deliveroo listing.

Mercedes-Benz car maker Daimler AG inched up 0.3% after raising its profit outlook for 2021, while luxury puffer jacket maker Moncler fell 6.6% after reporting first-quarter sales that were a touch lower than the year-earlier quarter. About 10% of the STOXX 600 companies have reported so far, and 67% of them have topped profit expectations, according to Refinitiv data. On an average, 51% beat analysts' estimates for quarterly profit.

Major regional indexes barely moved after a survey showed the euro zone's recovery from the pandemic-led economic downturn was much stronger than expected in April. IHS Markit's flash Composite Purchasing Managers' index, seen as a guide to economic health, rose to a nine-month high of 53.7 from March's 53.2.

Italian luxury goods group Tod's jumped 8.5% after France's LVMH agreed to increase its stake in the company to 10%. French media giant Vivendi rose 3.4% as strong performance at its music unit Universal and a sales jump at its publishing division helped its quarterly revenue grow.