European stocks drop ahead of German election

European stock markets moved lower on Friday, retreating from multiyear highs reached a day earlier, as investors opted for the sidelines ahead of the German election over the weekend. The Stoxx Europe 600 index lost 0.3% to close at 314.20, trimming its weekly gain to 0.9%, MarketWatch reported. The benchmark closed at the highest level since June 2008 on Thursday, spurred by euphoria that the US Federal Reserve abstained from scaling back its asset-purchase program as many analysts had expected. The central bank cited rising mortgage rates and reduced federal spending as headwinds that "could slow the pace of improvement in the economy." "It was very surprising and disappointing for the longer term view. The markets pushed higher on the back of it, but it will only support short term," said Richard Perry, chief market strategist at Central Markets. "But medium term there is still room for a correction in this market and once investors start to realize why Bernanke has gone against what he basically said he would do, I think it's going to sink in," he added.