The German DAX dropped 1.4 per cent and France's CAC 40 fell 1.2 per cent. UK's FTSE 100 declined 1 per cent despite data showing that Britain's economy recorded a smaller-than-expected contraction in November.
Hopes of a large US fiscal stimulus sent the Stoxx 600 to a 11-month peak earlier this week, but markets retreated after US president-elect Joe Biden outlined a US$1.9 trillion proposal that raised worries of a tax hike. "The rollout and the speed of vaccination is becoming increasingly important and the market is willing to look through a period of extended lockdown if it's a relatively short period." German business software group SAP closed down 0.7 per cent, reversing early gains after it released preliminary annual results that came at the high end of guidance.