By Danilo Masoni
MILAN (Reuters) - European shares fell, heading for their biggest weekly loss since before Donald Trump won the U.S presidential election in November, as investors grew cautious before his inauguration.
The STOXX 600 slipped 0.1 percent by 0826 GMT, on course for a five-day loss of almost 1 percent. Britain's FTSE (FTSE) was flat but set for a weekly decline of 1.8 percent.
The pan-European index has gained nearly 10 percent over the last two months, but it has slipped from its early January peak amid concern Trump may struggle to deliver on his stimulus promises.
"Trump's aggressive fiscal stimulus plans have been priced in by the markets to an extent where investors could now sit back and watch how fast his promises will be concretized," London Capital Group analyst Ipek Ozkardeskaya said.
The broader market was weakened by some disappointing earnings updates and share placements, although merger and acquisition talk helped support the telecoms sector.
Danish insurer Tryg (CO:TRYG) was the biggest STOXX loser, down 4.1 percent after its fourth-quarter profit missed expectations.
French voucher and prepaid card provider Edenred (PA:EDEN), which fell 2.8 percent after major shareholder Colony Capital sold its 11.2 percent stake in the company. A share sale also hit shares in Italian luxury goods maker Brunello Cucinelli (MI:BCU), which was down 2 percent.
TDC (CO:TDC) rose 3.8 percent after a report in Dagens Industri said telecom operator Telia (ST:TELIA) was considering a bid for the Danish company, which is itself exploring a takeover of Swedish cable TV company Com Hem. Telia and TDC both declined to comment on the report.
Gains in TDC drove Europe's STOXX telco index up 0.3 percent, the biggest gainer in Europe.
The sector losing the most was Europe's STOXX Basic Resources index (SXPP). It fell 1.2 percent as copper prices weakened, with concern about Trump's inauguration offsetting encouraging data from China, a major metals consumer [MET/L].
Banks were led higher by Italy's UBI Banca (MI:UBI). Its shares rose 3 percent to a nine-month high, bringing to more 40 percent their gains so far in January, as investors continued to approve its upcoming acquisition of three smaller rivals.
German banks were also strong with Commerzbank (DE>:CBKG) rising 2.8 percent after a price target upgrade from analysts at Deutsche Bank (DE:DBKGn).