By Sruthi Shankar

(Reuters) – European stocks struggled to gain momentum Friday, after strong gains earlier in the week. Investors focused on Russia-Ukraine talks which have not shown any tangible progress thus far.

The pan-European Index fell 0.2%. Automakers and energy stocks led the morning’s declines.

The benchmark still managed to achieve its highest weekly performance since November 2020, thanks to optimism about a settlement in the Ukraine crisis that rattled global markets.

In a phone call set for 1300 GMT, U.S. President Joe Biden will warn Beijing that it would pay a heavy price if Russia supports its war effort.

“In European markets we are close to where we were before the war. This is a very different scenario from the one we were pricing before. “If you look at earnings revisions…we still expect some enormous earnings growth for 2022,” explained Alexandre Deruaz of Unigestion’s portfolio management.

Oil is having a major impact on the cycle of growth. We’ve probably passed the maximum oil price for the near term, I believe. Everyone is aware that inflation has reached an all-time high, although it will eventually have less impact.

Concerns about Western sanctions against Russia, which is a key commodities exporter, led to crude oil prices reaching $139 per barrel. This raises concerns about rising inflation.

They have since retreated and are now trading at $107 per barrel. This has pushed down the energy stocks by 0.8%. [O/R]

After Reuters reports that Vantage Towers, the $16 billion telecom company Vantage Towers has been approached by global infrastructure funds to make investments in Britain’s Vodafone (NASDAQ):), Vodafone UK rose 1.4%. This stock gained 10.6%.

German real estate company Vonovia lost 1.8% despite saying it was poised for “significant growth” following a record-breaking year, and the acquisition in 2021 of smaller rival Deutsche Wohnen.