The pan-European STOXX 600 index fell 0.26%, snapping a four-day winning streak, as the number of deaths from the flu-like virus climbed to 636 and several more companies suspended operations in the country.

Burberry Group Plc said the outbreak was hitting luxury demand in China and Hong Kong, a key market for the British fashion brand. Its shares fell marginally.

China-exposed sectors such as basic materials, luxury and auto stocks, which have seesawed over the past two weeks on virus fears, were the biggest decliners on the day.

However, Friday's losses did little to deter the STOXX 600 from recording its best weekly gain since November 2018 as China's attempts earlier this week to limit the fallout of the outbreak reassured investors.

"Having already rallied hard this week, it was going to be hard to push equities higher into the weekend, especially given the uncertainty surrounding the coronavirus in China," Chris Beauchamp, chief market analyst at IG, wrote in a note.

After spending much of the session in the red, Swiss lender Credit Suisse Group AG ended 0.2% higher after Chief Executive Tidjane Thiam quit following a spying scandal that has hit the reputation of the Swiss bank.

Miner Norsk Hydro ASA tumbled 12% after missing quarterly profit estimates, while Belgian materials and recycling group Umicore fell about 10% after an earnings miss at one of its key divisions.

Economic data from the bloc this week had raised hopes that a slowdown may be bottoming out, but latest numbers showed German industrial output registered its biggest drop in more than a decade in December.

"The data has raised the risk that next week's GDP data could bring back the R-word for the German economy," said Carsten Brzeski, chief economist, Germany at ING, referring to fears of a recession.

Among the bright spots, cosmetics maker L'Oreal SA hit a record high and fertiliser maker Yara International ASA rose 5.3% after posting better-than-expected quarterly profit.

Shares in Finland's Nokia and Sweden's Ericsson rose about 6% each after U.S. Attorney General William Barr said the U.S. and its allies should consider taking a "controlling stake" in the European companies to counter China-based Huawei's dominance in 5G wireless technology.

By Sruthi Shankar