LONDON (CNNfn) - Europe's main markets were mixed at the close of trading Friday as telecom stocks in France declined amid concerns about future auctions for third-generation mobile phone licenses. German banking stocks rose on merger reports.
Frankfurt's Xetra Dax fell 197.22 points, or 2.69 percent, to 7,131.40 as chemical stocks continued the previous session's downward trend and technology stocks fell.
The CAC 40 in Paris lost 56.72 points, or 0.9 percent, to 6,456.26, ending the week more than 1 percent lower, with telecom stocks among the biggest decliners.
London's benchmark FTSE 100 rose 35.2 points, or 0.5 percent, to 6,526.0 amid gains for telecom, technology and media stocks. The index finished up more than 1 percent on the week.
Zurich's benchmark SMI rose 0.2 percent to 7,845.6.
The FTSE Eurotop 300, an index of he biggest companies across Europe, fell 5 points, or 0.3 percent, to 1,620.73.
In midday trading on Wall Street Friday, the Nasdaq composite rose more than 0.4 percent, while the Dow Jones industrial average lost 1.1 percent to 10,590.02.
European stocks probably are headed for a quiet time ahead of a two-day U.S. Federal Reserve policy meeting starting June 27 and other summertime distractions, equity strategist Chris Hills at Investec Bank UK said.
Fed rate decision awaited
"The markets are focusing on the next interest-rate move by the Fed," said Hills, who expects the Fed to raise its short-term rate by a quarter percentage point. "We've been getting conflicting signals in the U.S. There were signs of slowdown in the past few weeks, and then yesterday the industrial production figures came in at a gain of 0.4 percent, when most analysts expected a drop."
"In the U.K., there's clearly a lot of distraction from the market caused by sports tournaments," Hills added. "This time of year there is cricket, tennis at Wimbledon and Henley [rowing], not to mention European football - which is where a lot of televisions in the City will be tuned."
In the currency market, the euro rose to 96.39 U.S. cents from 95.35 cents in late New York trade Thursday. The dollar weakened against the yen to ¥106.22 from ¥106.61 late Thursday.
In France, the telecom sector came under pressure. Bouygues (PEN), France's third-largest mobile telephone company, was down more than 2.5 percent while CAC 40 index heavyweight France Telecom (PFTE) lost more than 5 percent and Suez Lyonnaise des Eaux (PLY) declined 0.7 percent.
Data network operator Equant (FEQU) fell 3.4 percent to  46.
Vivendi (PEX) rose more than 0.5 percent after Seagram CEO Edgar Bronfman told Business Week that a three-way merger with Vivendi and Canal Plus is close to being agreed on.
The biggest gainer on the CAC was drug maker Sanofi-Synthelab (PSAN), which rose more than 7.5 percent.
On the Frankfurt market, reported talks toward a new banking merger lifted  shares of Commerzbank (FCBK), which rose 3 percent - the Dax index's biggest gainer -- and Dresdner Bank (FDRB), up 0.4 percent. Dresdner failed in April to complete a planned merger with Deutsche Bank (FDBK).
Electronic components maker Epcos (FEPC) fell 6.1 percent.
Chemical companies took another pounding as Henkel (FHGKL) fell 2.7 percent, BASF (FBAS) dropped 2.9 percent, and Bayer (FBAY) slid 2.4 percent.
In London, telecom stocks were among the top gainers. Colt Telecom (CLT) rose more than 6.8 percent to top the index, it was closely followed by Kingston Communications (KCOM), which rose 6.6 percent, Internet data carrier Energis (EGS), up 5.3 percent, and Thus (THUS) climbing 3.6 percent.
In the U.K. media sector, publisher Pearson (PSON) rose 5.9 percent and the world's biggest advertising company, WPP (WPP), advanced 3.6 percent.
IT firm Logica (LOG) rose 6.1 percent, software house CMG (CMG) gained 4.6 percent, and chip designer ARM Holdings (ARM) rose more than 4.5 percent. 
-- from staff and wire reports
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