The German DAX has recorded its largest single-day loss in seven months, completing a considerable slide from a record high posted earlier in the week. Many other key indices finished the week on similar trajectories.
Frankfurt's main DAX-30 share index closed at 9,392.02 points on Friday, falling around 2.5 percent in the week's last day of trading. The DAX peaked on Tuesday at an all-time high of 9,794 points, following an overwhelmingly positive 2013 on most major world markets, but has closed in the red in the three subsequent days of trading.
Sportswear brand Adidas was the largest loser on the day, down 5.46 percent, with analysts attributing losses to a strong euro threatening the company's exports.
London's FTSE 100 shed around 1.6 percent of its value on Friday, France's CAC 40 went into the weekend down almost 2.8 percent, while Japan's Nikkei 225 slipped 1.9 percent. In the US, the Dow Jones just managed to avoid a daily drop of 2 percent, while the Nasdaq's losses narrowly exceeded that figure.
China, currencies, and not-so-cheap money
The US losses were fuelled in particular by talk of the Federal Reserve, the country's central bank, cutting its stimulus measures when it meets next week. Since 2008, the Fed has been buying up government bonds - part of a contentious program designed to keep interest rates low, encouraging lending and spending. In December, the Fed cut this spending to $75 billion (55 billion euros) per month from $85 billion; some economists expect a similar further reduction next week.
"If [interest] rates start to go higher, money will come back into the bond market because people have guaranteed rates and it will come out of the stock market," Ken Polcari from O'Neil Securities told the Reuters news agency.
Argentina's free-falling peso currency helped contribute to Friday's uncertainty, as more and more citizens sought to exchange their inflation-hit currency for US dollars. Similarly, Turkey's lira, buffeted primarily by the corruption scandal threatening Prime Minister Recep Tayyip Ergodan's government, hit an all-time low against the dollar on Friday.
Another year of comparatively sluggish economic expansion in China also posed questions about one of the world's most reliable recent motors for growth.
Trading has been overwhelmingly bullish in the western world over the past year. Markets in the US, Germany and Japan all repeatedly hit record highs late in 2013, while traders in London and Paris enjoyed their best year on the floor since 2009.
msh/ccp (AP, dpa, Reuters)