"European stock markets were on the back foot Friday as investors paused for breath and consolidated recent gains a day after the benchmark Stoxx600 index closed at a near five-year high," Ishaq Siddiqi, a market strategist at ETX Capital said in a note.
This Friday also marked quadruple witching, a day in which contracts on stock index futures, stock index options, stock equity options, and single stock futures expire. This happens once every quarter, on the third Friday of March, June, September and December. Quadruple witching is associated with market volatility as investors seek to rebalance their portfolios.
(CNBC Explains: Witching Hour)
The pan-European FTSEurofirst 300 Index closed provisionally down 0.4 percent at 1,202.65 points after the conclusion of an EU summit, at which heads of state discussed the region's austerity and growth policies, rising youth unemployment and whether to give countries such as France and Spain leeway on EU budget rules.
The president of the European Commission, Jose Manuel Barroso, told CNBC that the onus to reduce debts lay with national governments, but the EU would help them.
"It is up to the individual national governments but now we are mobilizing funds from the European Union for that…it is a joint venture," he told CNBC in Brussels on Thursday.
Cyprus' bailout was not on the EU summit agenda, but EU officials are working to finalize a deal which they hope will get approval from the IMF and euro zone finance ministers later on Friday. Reuters reported the bailout is likely to be close to 10 billion euros ($13 billion), citing euro zone officials with insight into negotiations.