European shares flat after hawkish ECB, Italian crisis-related volatility

European shares steadied on Friday in the aftermath of a bigger-than-expected interest rate hike by the European Central Bank and a collapsed government in Italy, but they were still on course for their biggest weekly gain in two months. The pan-European STOXX 600 index was flat, as gains in energy shares offset losses in most other sectors in early deals.

European shares steadied on Friday in the aftermath of a bigger-than-expected interest rate hike by the European Central Bank and a collapsed government in Italy, but they were still on course for their biggest weekly gain in two months.

The pan-European STOXX 600 index was flat, as gains in energy shares offset losses in most other sectors in early deals. The index had ended a volatile session higher on Thursday. Markets had gyrated after the ECB lifted rates by a larger-than-signaled 50 basis points, while scant details of a tool to control widening gaps between Europe's core and peripheral bonds left investors less than impressed.

Italian shares were a touch lower, after a tumultuous session as the country prepared for a snap national election on Sept. 25 after Prime Minister Mario Draghi resigned following the collapse of his national unity government. On the week, however, major European bourses were set to end higher on easing worries about an energy supply crunch after Russian gas flows into Europe resumed post a scheduled maintenance outage.

Danske Bank fell 2.6% on axing dividends, while Swiss elevator and escalator manufacturer Schindler slipped 4.0% on cutting 2022 revenue guidance. Aluminium-makerNorsk Hydro rose 4.1% on proposing an extra dividend and offering share buybacks.

Lloyd's of London insurer Beazley topped the STOXX 600 on raising its full-year profitability outlook.