European equities closed higher on Friday, ending their best week in eight months, after stellar gains in the previous session as investors reacted to the U.S. Federal Reserve's decision to "taper" its monetary stimulus program.
The FTSEurofirst 300 Index provisionally closed up 0.4 percent at 1,287.13 points, as investors continued to digest news from the Fed on Wednesday. The FTSE 100 closed up around 0.33 percent, finishing the week 2.46 percent higher. The DAX provisionally closed up 0.69 percent, with the index up 4.3 percent for the week.
On Wednesday, the U.S. central bank's monetary policy committee said it would start winding down its bond-buying program gradually, trimming its monthly asset purchases by $10 billion to $75 billion from January onwards. It sought to temper the policy move by suggesting its key interest rate would stay near zero "well past the time" unemployment falls below 6.5 percent.
U.S. stocks also climbed on Friday, with equities on track for weekly gains after data revealed that the U.S. economy grew faster than projected in the third quarter, increasing optimism about the economic outlook. The Commerce Department reported that gross domestic product rose at a 4.1 percent annualized rate -- up from a prior estimate of 3.6 percent.
UK GDP confirmed
Back in Europe, U.K., third-quarter gross domestic product (GDP) was confirmed at 0.8 percent on Friday, while the year-on-year figure was revised higher to 1.9 percent from 1.5 percent. However, the U.K.'s third-quarter current account deficit widened to £20.7 billion from £6.2 billion in the second quarter, according to official data, the widest deficit seen in the country since 1989.
In other news, the Italian government called a confidence vote on its 2014 budget on Thursday to ensure final parliamentary approval of the fiscal package before an end-year deadline. Prime Minister Enrico Letta won the vote on Friday by 350 to 196, thus ensuring the initial approval of his spending package.
On Monday, the Senate will hold another confidence vote in which the budget is widely expected to win final approval, converting it into law.
China's spiking money market rates remained in focus for Asian investors as the benchmark seven-day bond repurchase agreement hit 7.5 percent in late-morning trade, its highest level since June 24. The move came even after the People's Bank of China's took emergency steps on Thursday to inject liquidity into selected banks.
BAE shares down
In stocks news, shares of cruise company Carnival provisionally closed up 3.33 percent after three different upgrades by investment banks.
BAE Systems ended the day 4.50 percent lower after it announced that the United Arab Emirates had decided not to proceed with a deal to buy its Eurofighter Typhoon aircraft.
Shares of Belgian telecom firm Telenet Group finished the day up by around 2.92 percent after Goldman Sachs upgraded its outlook to a "buy" from "neutral".
Shares in Banca Monte dei Paschi di Siena closed the day higher by roughly 4.95 percent on speculation that its top shareholder might cut a deal with other banking foundations to pay back its debt.
Follow us on Twitter: @CNBCWorld