The Spanish selective index Ibex 35 closed in the red on Friday, its worst week since August, after investors moderated their forecasts regarding interest rate cuts.

"The reduction in expectations of rate cuts (which will possibly not take place until the second half of the year) had a more negative impact on European stocks, as their economies look less healthy than those of the United States," said Axel Rudolph, analyst at IG.

This week's World Economic Forum in Davos became a battleground between hawks (advocates of tight monetary policy) and doves (supporters of easing), casting doubt on the roadmap of the major central banks.

The ECB is on track to bring inflation back to its 2% target, but has not yet finished its work, as it looks forward to the wage data due in late spring, as President Christine Lagarde recalled in Davos.

In addition, both the geopolitical tensions that remain in the background and the lack of new incentives for purchases kept the market's tone more subdued, after the bullish run in November and December.

Spain's selective Ibex-35 closed down 22.00 points on Friday, down 0.22%, to 9,858.30 points, while the FTSE Eurofirst 300 index of large European stocks lost 0.23%.

In the banking sector, Santander lost 0.20%, BBVA fell 1.09%, Caixabank advanced 0.03%, Sabadell gained 0.31%, Bankinter gained 0.65% and Unicaja Banco lost 5.46%.

Among the large non-financial stocks, Telefónica gained 1.26%, Inditex advanced 0.62%, Iberdrola dropped 0.40%, Cellnex gained 0.33%, and the oil company Repsol lost 1.74%.

(Information by Matteo Allievi, edited by Tomás Cobos)