By Ankika Biswas and Shashwat Chauhan
(Reuters) -European shares were flat on Friday as a decline in luxury firms and automakers offset gains in commodity-linked sectors, while Danish drugmaker Novo Nordisk (CSE:NOVOb) dethroned LVMH as Europe's most valuable listed company.
The pan-European STOXX 600 closed flat, although notching its best weekly gain of 1.5% since mid July, as China-exposed stocks lifted sentiment this week on signs of more stimulus measures from Beijing.
Miners gained 1.5% as most base metal prices rose after top consumer China announced measures to support its property market and data showed expansion in its manufacturing sector.
The oil and gas sector added 1.9% tracking higher crude prices.
Among top movers, Novo Nordisk gained 2.1% on emerging as the most valuable listed company in Europe, riding on demand for its diabetes and weight-loss drugs, and aiding a 0.5% gain in the healthcare sector.
LVMH shed 0.8% on losing its 2-1/2-year-long position, with the luxury sector slipping 1%.
European automakers were the worst hit, down 2.6%, as Volkswagen (ETR:VOWG_p) AG and Renault (EPA:RENA) dropped 5% and 6.3%, respectively, following UBS' rating and price target downgrades on the stocks.
Also weighing on the sector was top electric-car maker Tesla (NASDAQ:TSLA) cutting its premium Model S and Model X prices in its top markets China and the United States.
On the data front, France's manufacturing sector contracted for the seventh consecutive month, while another reading showed Germany's manufacturing sector remained mired in a downturn in August.
Further, Italy's GDP shrank by 0.4% in the second quarter from the first and its manufacturing sector contracted in August for a fifth consecutive month.
Another survey, however, showed the euro zone manufacturing downturn eased last month, suggesting the worst may be over for the bloc's beleaguered factories although demand weakened to its lowest in almost a year.
"Even though it's just one reading, the general feeling is we may have avoided the worst of the recessions in Europe," said James Baxter (NYSE:BAX), founder of Tideway Wealth.
"Inflation is coming down, maybe not quite as quickly as some people hope, but it is... and there's an increasing feeling that we might be close to an interest rate peak."
Policymaker Francois Villeroy de Galhau noted the European Central Bank has a range of options at its policy meeting, although interest rates are near their high point and there are signs underlying inflation has peaked.
Among others, Aurubis slumped 6.1%, touching a near 10-month low, as the largest European copper producer suspects a criminal gang had stolen some of its metal, saying it would miss full-year profit guidance on finding "considerable discrepancies" in inventories.
Johnson Matthey (LON:JMAT) jumped 9.8% to top the STOXX 600 after the investment arm of New York-based industrial firm Standard Industries doubled its stake in the British autocatalyst maker to 10%.