Europe close: Stocks end near session lows

Stocks finished near their worst levels of the session on Friday as Wall Street got off to a weak start, with the Dow Industrials drawing a wide arc within a 600-point range in just the first 90 minutes of trading.

Weighing on investors' minds, was the apparent as yet unresolved face-off between central bankers and financial markets, as the former leaned against simmering inflation worries while the latter continued to price-in a more gradual pace of tightening than what policymakers semed to be guding towards.

Against that backdrop, traders were already eyeing the next monthly reading on US consumer prices which set for release during the following week.

Thus, at the close of trading the benchmark Stoxx 600 was down by 1.45% or 5.42 points at 368.61, alongside a fall of 1.25% or 152.81 points on the German Dax to 12,107.48.

Further out on the periphery, the FTSE Mibtel was off by 1.33% or 299.85 points to 22,166.75 and the Cac-40 by 1.41% at 5,079.21.

In parallel, the VStoxx volatility gauge was higher by 8.42% at 34.74, near its post-Brexit vote high.

Meanwhile, across the Pond, Fed funds futures were still only discounting two 25 basis point rate hikes in 2018 with even odds of a third, contrary to many commentators' speculations around three or even four hikes.

Economic data was thin on the ground at the end of the week, with investors focused on the latest industrial production figures out of France and Italy.

According to INSEE, industrial production in France advanced at a 0.5% month-on-month clip in December, as expected.

Down in Italy on the other hand, ISTAT reported that total output was ahead by 1.6% month-on-month (consensus: 0.8%) in December.

In the corporate headlines, according to Reuters Italy's Atlantia clinched the financing needed to up its takeover bid for Spain's Abertis.

Elsewhere in Italy, Eni denied all allegations that it had attempted to meddle in judicial allegations.

Local Carrefour rival Leclerc posted a 2% rise in full-year 2017 sales to reach €37.2bn.