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STOXX 600 index ends week with declines

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Danske Bank ( DNSKF ) rises on strong Q3 profit, Scor drops after

results

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Euro zone Oct inflation at 2.1% y/y vs. 2.2% in Sept

(Updates after markets close)

By Medha Singh and Purvi Agarwal

Oct 31 (Reuters) - European equities edged lower on

Friday as investors absorbed mixed quarterly results and a

benign euro zone inflation report that reinforced the European

Central Bank's view that price pressures remain contained.

The pan-European STOXX 600 index ended down 0.5%,

its fourth straight losing session.

However, it wrapped up its fourth consecutive month of

gains, and its best since May, as hopes of easing U.S. interest

rates, improving trade relations between Beijing and Washington

and resilient earnings had powered it to record highs this

month.

On Friday, insurers were the biggest decliners, down

1.9%. AXA fell 4.4% after reporting a drop in new

business profits in its life insurance business and weaker

pricing. Paris-based Scor dropped 13% after reporting

third-quarter results, leading losses on the STOXX 600.

Bank stocks were the only bright spot. Erste Group

Bank jumped 5.5% after the lender raised its annual

outlook after its third-quarter results, while Danske Bank ( DNSKF )

rose 3.1% after Denmark's biggest bank

reported quarterly net profit slightly above expectations.

Gains in bank stocks helped limit losses on the Spanish

and Italian stock exchanges to 0.1% each.

On the data front, euro zone inflation slowed a touch in

October and continued to hover near the European Central Bank's

2% target, backing its assessment on Thursday that the economy

remains on a relatively benign path.

The ECB kept interest rates unchanged at 2% for the third

meeting in a row on Thursday, fuelling expectations that they

will stay on hold through this cycle.

Barclays on Friday dropped its forecast for a quarter-point

rate cut in December, expecting the ECB to keep rates steady.

"Today's numbers emphasise that this was probably the right

call," Bert Colijn, an economist at ING, said about the ECB's

Thursday's decision to keep rates on hold.

The benchmark stock index ended the week slightly lower as

traders weighed the chances of fewer interest rate cuts in the

U.S. and Europe, a flurry of earnings from U.S. tech

heavyweights and a fragile trade truce between China and the

U.S.

"It is positive that the two sides can de-escalate tensions,

but we expect to see more bumps on the road," said Danske Bank ( DNSKF )

analysts.

Apple's ( AAPL ) strong holiday-quarter iPhone sales

forecast and sharp acceleration in Amazon's ( AMZN ) cloud

revenue growth reinforced Big Tech's dominance amid concerns

over stretched stock valuations.