Europe's major stock markets steadied on Friday, with London slipping on the back of the pound's modest recovery, dealers said.
The British capital's benchmark FTSE 100 index of top blue-chip companies shed 0.4 percent, after hitting a record closing peak the previous day with traders gripped by Brexit newsflow.
Frankfurt's DAX 30 added 0.1 percent, having breached the symbolic 13,000-point barrier for the first time on Thursday on easing Catalan concerns. The Paris CAC 40 turned flat.
"Yesterday's record close for the FTSE 100 has not been followed by fresh bullish momentum, as a rally in sterling to its highest level since the beginning of the month hampers... the index," said IG (Frankfurt: A0EARV - news) analyst Chris Beauchamp.
London stocks were catapulted Thursday to an all-time closing pinnacle on the weak pound, which boosts earnings of exporters.
Sterling initially sank after EU negotiator Michel Barnier warned that Britain and Brussels are stuck in a "disturbing" deadlock over the Brexit divorce bill.
However, the currency then rebounded as German newspaper Handelsblatt reported that Britain could be given a two-year extension to complete Brexit.
The British unit continued to regain its composure on Friday.
"Sterling is on quite the rollercoaster ride, recovering from Michel Barnier's 'disturbing deadlock' comments thanks to a report in Handelsblatt," noted Spreadex analyst Connor Campbell.
- 'Transitional' Brexit deal? -
"Yesterday afternoon's pound-plunge was sizable enough to send the FTSE to a fresh all-time closing high," the expert said.
"Yet by the evening, the currency had clawed back its losses, and then some, after Handelsblatt claimed the EU are prepared to offer the UK a two-year transitional deal, where the latter would meet all of its financial obligations but give up its voting rights," Campbell said.
There were cautious gains in Asia on Friday after an underwhelming session overnight in New York, but Tokyo pushed ahead after hitting a 21-year high earlier in the week.
Wall Street stepped back Thursday after clocking up a number of all-time highs in recent weeks fuelled by hopes for the earnings season and the US economy.
Crude futures also pushed higher before US President Donald Trump's speech later Friday, when he is expected to unveil a more aggressive strategy to check the growing power of key OPEC oil producer Iran.
- Key figures around 1045 GMT -
London - FTSE 100: DOWN 0.4 percent at 7,529.02 points
Frankfurt - DAX 30: UP 0.1 percent at 12,994
Paris - CAC 40: FLAT at 5,360.49
EURO STOXX 50: FLAT at 3,606.92
Tokyo - Nikkei 225: UP 1.0 percent at 21,155.18 (close)
Hong Kong - Hang Seng: UP 0.1 percent at 28,476.43 (close)
Shanghai - Composite: UP 0.1 percent at 3,390.52 (close)
New York - DOW: DOWN 0.1 percent at 22,841.01 (close)
Euro/dollar: UP at $1.1830 from $1.1828 at 2100 GMT
Pound/dollar: UP at $1.3301 from $1.3260
Dollar/yen: DOWN at 112.13 yen from 112.29 yen
Oil - Brent North Sea: UP $1.25 at $57.50 per barrel
Oil - West Texas Intermediate: UP 99 cents at $51.59