European stock markets slid modestly on Friday, following sharp losses suffered the previous day, failing to score gains despite positive data from Germany and the US.
London's FTSE 100 (FTSE: ^FTSE - news) index of leading shares shed 0.63 percent to 6,654.34 points, while in Frankfurt the DAX 30 (Xetra: ^GDAXI - news) index fell 0.56 percent to 8,305.32 points and in Paris the CAC 40 (Paris: ^FCHI - news) slid 0.26 percent to 3,956.79 points.
The Madrid market dropped 0.95 percent and Milan shed 0.65 percent.
After the drama of Thursday's sell-off, trading was much calmer as investors weighed up whether the fall was the first phase of a much deeper correction still to come, said Matt Basi, head of UK sales trading at CMC Markets.
"Much stronger than expected measures on the German IFO business survey ... weren't enough to inspire a return to 'buy the dip mode' in Europe this morning as bulls took a more cautious approach, with speculation over an end to the Fed's asset purchase programme back on the agenda," he said in a broker note.
German business confidence rose unexpectedly in May, data showed on Friday, as businesses in Europe's top economy express become more optimistic about the future.
The Ifo economic institute's closely watched business climate index rose to 105.7 points in May from 104.4 points in April. Analysts had been expecting an unchanged reading.
"The firms are clearly more satisfied with their current business situation than in the previous month. The outlook for future business is unchanged and slightly positive," said the think tank's economist Kai Carstensenhe.
On Thursday, most European indices dropped more than 2.0 percent after Tokyo shares plunged owing to weak Chinese data and signs that the US Federal Reserve may soon taper massive stimulus measures.
European equities had pulled back sharply after recent record and multi-year highs on the back of improving world economic data despite ongoing eurozone strains and some still weak numbers out of the United States and China.
Tokyo's main index ended down more than seven percent on Thursday as investors took profits also after strong recent gains. It recovered slightly on Friday, closing up 0.89 percent.
The Tokyo market has gained in recent weeks from a weakening yen, which lifts demand for Japanese goods abroad, boosting the profits of exporting companies.
In Friday deals, the dollar slid to 100.98 yen from 101.82 yen late in New York on Thursday.
The euro meanwhile slipped to $1.2917 from $1.2935 on Thursday, when markets responded to talk from Federal Reserve chief Ben Bernanke that the US central bank could scale back stimulus measures.
"The euro has remained relatively stable against the US dollar over the past week, deriving support from tentative signs that the pace of economic recession in the eurozone is easing," said Lee Hardman, currency analyst at The Bank of Tokyo-Mitsubishi UFJ in London.
On the London Bullion Market, the price of gold dropped to $1,390.25 an ounce from $1,408.50 on Thursday.
US stocks fell despite a rebound in US durable goods orders in April.
In midday trading, the Dow Jones Industrial Average was down 0.19 percent to 15,264.83 points, while the broad-based S&P 500 lost 0.32 percent to 1,645.19 and the tech-rich Nasdaq Composite fell 0.34 percent at 3,459.42.
Basi said the unexpected rise in US durable goods orders hurt share prices as it added "weight to the argument for a reduction in monetary stimulus from the Fed."
Friday's retreat in stock prices "is an example of the arm-wrestle that is likely to play out in the markets over the next few months as both sides of the stimulus debate make their case."