London's benchmark FTSE 100 index slipped 0.19 percent to stand at 6,144.29 points in late morning deals after opening with slight gains.
In the eurozone, Frankfurt's DAX 30 dropped 0.84 percent to 10,124.45 points and the CAC 40 in Paris shed 0.73 percent to 4,563.09, extending Thursday's losses after a recent rally.
The euro edged up to $1.1278 from $1.1275 late on Thursday in New York.
"Risk appetite has certainly improved this week although we’re still seeing investors hold back a little," said Craig Erlam, senior market analyst at Oanda trading group.
"One of the key risks all along has been the Federal Reserve and whether it will raise interest rates at the meeting next week."
Asian stock markets mostly fell Friday but ended a volatile week in relative calm after China unveiled a series of steps to shore up its economy and reassure investors, although fears of a US interest rate hike kept nerves on edge.
Global investors are nervously waiting for next week's Federal Reserve policy meeting, with uncertainty over whether it will lift interest rates for the first time in nine years or hold fire owing to the recent market turmoil.
A hike in borrowing costs would likely hinder investment possibilities and also fan a flight of capital back to the United States in search of better returns, to the detriment of emerging markets.
Hopes that bank policymakers will opt not to raise rates supported US stocks, with Wall Street's three main indexes all ending strongly higher on Thursday.
"Main focus today will be on the release of US producer prices," said Markus Huber, senior analyst at brokers Peregrine & Black.
"Should they come in below expectations it would certainly add to the argument that the Fed shouldn't be in any rush at all to hike rates with inflation likely to be well-below target for the foreseeable future."
In Europe, official data published Friday showed Germany's inflation rate at just 0.2 percent in August.
The economic slowdown in China and depressed oil prices have pushed inflation expectations in the eurozone back down.
Meanwhile cheap oil prices ushered in by Saudi Arabia's policy of protecting its market share will end up squeezing high-cost producers like US shale drillers, leading next year to the biggest drop in output in nearly a quarter century, the IEA said Friday.
Cheap fuel is also hooking consumers, with oil demand growth set to hit a five-year high this year, the International Energy Agency said in its monthly report.