European shares closed lower on Friday, finishing August at a loss overall, as a reduced chance of an immediate military strike on Syria weighed on energy equities via weaker oil prices.
The FTSEurofirst 300 Index provisionally closed down 0.9 percent, and stocks such as BP, Statoil, Total and Royal Dutch Shell all closed down between 0.8 and 1.3 percent, bringing the FTSE 100 down 1.1 percent.
The price of Brent crude oil fell back to $114 from $117, as Britain said it will not join any military action against Syria.
After seven hours of debate, U.K. lawmakers voted 285 to 272 against a government motion on military intervention in Syria. Speaking after the result, U.K. Prime Minister David Cameron said he believed in the need for a tough response to the use of chemical weapons, but respected the will of parliament.
The U.K. Defence Secretary confirmed that the country would not take part in any military intervention, but said he expected the U.S. and others to press on with a response to last week's alleged chemical weapons attack by Syria on its own civilians.
President Barack Obama will decide on a response to Syria based on U.S. interests, the White House said on Thursday, but will continue to consult with Britain, despite the "no" vote.
In the U.S., stocks declined on the final trading day of August, with the Dow and S&P 500 poised to log their worst monthly declines since May 2012, following a mixed bag of economic reports.
Euro zone business sentiment data released by the European Commission on Friday showed optimism in the sector improved sharply in August with an increase of 2.7 points to 95.2. But while euro zone morale climbed, unemployment remained at a record high with a figure of 12.1 percent for July.
(Read More: Euro zone unemployment rate remains at record high)
Spain retail sales fell for the 37th straight month on Friday, with official data showing a 3.9 percent decrease in July on a yearly basis. In the U.K., consumer confidence rose to the highest level in almost four years in August, as the body representing U.K. businesses upgraded its economic forecasts for the country.
Portuguese shares were hit by new concerns about the country's finances after its constitutional court rejected a bill that would have allowed public sector workers to be fired and was part of the government's efforts to cut costs. The PSI 20 closed the day down 1. 49 percent.
Shares of French cosmetics company L'Oreal climbed by 3.15 percent after reporting improving profit margin in its latest earnings report.
Global chemical major Arkema received a bounce after an upgrade to "outperform" from Exane BNP Paribas; shares rose by 0.49 percent.
Shares of retailer Hermes International climbed by 2.11 percent after the French group reported a forecast-beating 14 percent rise in first-half operating profits, with strong demand for leather and silk accessories.
Follow us on Twitter: @CNBCWorld