European equities dropped Friday, finishing their third consecutive week in the negative as the basic resources sector was battered by drops in Anglo American, but airlines and hotel businesses rose after the U.K. announced they were considering relaxing travel restrictions. FRANKFURT: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany.-REUTERS Anglo American dropped 8.1% following downgrades from Morgan Stanley and UBS. Additionally, European mining stocks fell by almost 8% in one week because of concerns about sluggish development in China. The pan-European STOXX 600 index dropped 0.9% over the course of the day. The London FTSE 100 miner-heavy index declined 0.9%, while the German DAX declined 1.0%. The majority of local indexes were weighed down this week due to concerns about a global economic slowdown and Chinese firms’ tougher regulations. According to Chris Beauchamp, chief market analyst at IG, this year’s drastic selloff is “one of the most extreme pullbacks we have witnessed.” It’s due to inflation, stagflation, a slowdown, and virus concerns. European leisure and travel indexes rose on Friday, with one index, the European leisure and travel index, increasing 1.2 percent, one of the strongest performances this year. European sectors had gains, as the index closed 2.7% higher, finishing the week. British Airways company IAG and InterContinental Hotels each saw their stock prices rise between 2 and 5 percent following the British government’s announcement that it will simplify the COVID-19 foreign travel regulations. [.L] European stock markets seemed to be maintaining their balance heading into the weekend, but the near-term market direction will likely hinge on whether the Federal Reserve and the Bank of England’s policy meetings, together with the German elections, turn out favourably for investors. “The caution we have seen this week is something to consider,” IG’s Beauchamp stated. “This may be of even more concern when you factor in the upcoming Federal Reserve meeting.” After severe losses in the previous week due to fears of new coronavirus-related limitations and regulatory actions in China, China-exposed luxury companies including LVMH, Kering, Hermes, and Richemont rose again. Commerzbank rose 1.2% following a Handelsblatt storey that said that U.S. investor Cerberus was considering acquiring a 15.6% stake in the bank after the federal election. Spanish pharmaceutical company Grifols’ stock price increased 5.8% following the announcement of a potential merger of German competitor Biotest, valued at 1.6 billion euros ($1.9 billion), in an effort to unify the plasma-based medication business. The United Kingdom’s retail sales recorded a drop in August, continuing a run of monthly decreases that is currently at a record high. [.L]