European shares fell on Friday with gains in insurance heavyweight Allianz and firmer pharma stocks more than offset by a pull-back in banking and mining stocks.
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The pan-European STOXX 600 index fell 0.5 percent but remained close to a 13-month high reached on Wednesday and on track to end higher for the second week in a row.
The rally has been fueled by strong earnings updates, a pick up in merger and acquisition (M&A) activity, with cyclical stocks such as mining companies and banks lifted by solid economic data.
Allianz rose 2.4 percent. Europe's largest insurer proposed spending 3 billion euros on buying back its own shares after posting higher-than-expected profits and saying it was adjusting its policy on budgeting for possible takeovers.
The Munich-based firm also raised its dividend.
"The combination of a dividend increase and a share buy-back probably both at the upper end of market expectations is a sign of strength and should improve sentiment and provide tailwind for the shares," DZ Bank analyst Thorsten Wenzel said.
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Elsewhere in the insurance sector, Dutch insurer Aegon rose as much as 4.2 percent as investors cheered to a stronger than expected pretax profit growth. Its shares pared gains and were last up 0.3 percent.
On the M&A front, Stada was once again in focus after the German generic drugs company said it had received its third takeover approach, valuing the company at 58 euros per share, above its current market value and higher than a previous takeover offer. Its shares rose 1.1 percent.
Some big drugmaker stocks were also in demand, lifting the healthcare index up slightly and making it the only sectoral gainer in Europe.
Britain's AstraZeneca and GlaxoSmithKline were up 1.6 percent and 0.5 percent respectively after analysts at Jefferies raised the price target for both.
Europe's STOXX bank index fell 1.2 percent as investors booked profits for a second day after the index hit a three-week high on Wednesday, helped by growing expectations of a rate hike next month in the United States.
Deutsche Bank, Standard Chartered and Credit Agricole fell between 2.6 and 2.8 percent.
Miners were also weaker, down 1.1 percent, pulling back after climbing earlier this week to their highest level in more than two years. Copper slid on Friday because of some profit taking, but the likelihood of strong demand from top consumer China were expected to support prices.
"Short-term technicals remain in overbought territory making rounds of profit-taking...more likely," said Markus Huber, trader at City of London Markets.
Top loser on the STOXX was Vopak, down 8.7 percent, after the Dutch oil and chemical storage company said it did not expect core profit to grow this year.
(Reporting by Danilo Masoni; Editing by Angus MacSwan)