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Europe shares shaken as NY Ebola case and stress tests weigh

Stress tests not the end of the story: Pro

European shares staged a small recovery Friday in spite of concerns about the results of Europe's bank stress tests and the first Ebola case in New York.

Banking stocks took a hit from reports that more euro zone banks than previously thought would fail the region-wide stress tests. Bloomberg reported that 25 banks from the euro zone would fail the tests, which are designed to assess the health of the region's banking sector. The results are due to be published Sunday.

The FTSEurofirst 300 closed Friday up 0.24 percent.

Read MoreEuropeneeds to get its act together: Soros

European Markets: FTSE, GDAXI, FCHI, IBEX

Ebola weighs

The diagnosis of an Ebola case in New York also put pressure on stocks. The New York Times reported early on Friday that a doctor in New York City, identified as Craig Spencer, has tested positive for the Ebola virus after returning from treating patients in West Africa.

Speaking at a press conference, New York Mayor Bill de Blasio sought to calm the public, saying officials believed "very few" people had contact with the doctor since his return. He reiterated that Ebola is not an air-borne virus.

Read MoreDoctor tests positive for Ebola in NYC

U.S. stocks edged higher on Friday, adding to weekly gains, amid disappointing earnings from Amazon despite worries about the potential spread of the virus.

Amazon dropped sharply in early New York trading after the online retailer offered a weak sales outlook for the important holiday quarter and third-quarter results came in below estimates.

Asian equities were mixed over concerns over Ebola and China, where official data showed new home prices falling 1.3 percent year on year in September, the first annual drop in nearly two years.

Tesco falls further

On the FTSE 100, publishing firm Pearson performed badly, closing down 2.6 percent after the company posted flat nine-month revenue. The company also said its CFO, Robin Freestone, would step down at the end of 2015.

Supermarket Tesco was also lower, closed down around 1.3 percent on Friday. Vodafone, however, was trading higher, with shares up 1.9 percent.

Ericsson posted third-quarter sales above expectations on Friday. Chief executive Hans Vestberg told CNBC that the company had seen gradual improvements in profit and growth. "We're doing a pretty decent job to improve our core business," he said.

It comes after preliminary growth data from the U.K. showed that gross domestic product (GDP) grew 0.7 percent in the third quarter, in line with forecasts in a Reuters poll. Sterling rose against the dollar after the data.

Meanwhile, the EU has demanded that Britain pays an additional 2.1 billion euros ($2.66 billion) to the 28-country group's budget.

Read MoreUK PM slams'appalling and unacceptable' EU bill

Elsewhere in Europe, stocks of carmaker Volvo were up 1.4 percent after the company reported a rise in core earnings on Friday.

But Europe's second biggest insurer, AXA, closed lower by almost 1 percent after posting flat nine-month revenue growth.