Italy's borrowing cost jumps, Belgium's credit rating cut

There was no respite for Europe as the week drew to a close.

Italy's borrowing cost jumped at Friday's debt auction. Italy paid 6.504 percent to sell 8 billion euros of six-month bills, almost twice the 3.535 percent a month ago and the highest since August 1997.

Meanwhile, another eurozone sovereign rating has been downgraded. Standard & Poor's cut Belgium's credit rating one level to AA+ on Friday.

Despite the continued deterioration in the sovereign debt situation, European stocks managed to advance on Friday, the STOXX Europe 600 Index rising 0.7 percent to 221.54. That still left the index down 4.6 percent this week.

US stocks fell though. The S&P 500 declined 0.3 percent to 1,158.67 to end the week down 4.7 percent.

Economic data released on Friday were not any kinder to Europe. Italian retail sales fell 0.4 percent in September, its fourth consecutive monthly decline. Meanwhile, Insee's consumer confidence for France fell to 79 in November, a level not seen since the last recession, from 82 in October.

Europe did not have a monopoly of negative news on Friday. Japan reported a return to deflation as consumer prices excluding fresh food fell 0.1 percent in October.