European shares fell on Friday, snapping a four-day winning streak, with banks and miners the major fallersafter China raised its banks' reserve requirements for the second time this year.
By 1140 GMT, the pan-European FTSEurofirst 300 index was down 0.1 percent at 989.57 points after being up as much as 1,002.50 earlier.
Banks took the most points off the index. HSBC, Banco Santander, BNP Paribas, Barclays and Lloyds Banking Group fell 2 to 5.5 percent.
"We have got the China effect coming in and the implications of possible monetary tightening," said Peter Dixon, economist at Commerzbank.
Few in the market were expecting China to tighten policy again so soon, especially after a surprisingly low inflation reading for January.
Meanwhile, an EU government source told Reuters that next week's European Union finance minister meeting is unlikely to decide an aid package for Greece, but adverse market reactions could trigger a decision at any time.
"There is uncertainty about the Greek bail-out and what the support plans actually mean … Investors just remain extremely nervous," Dixon said.
The International Monetary Fund joined the European Union in pledging support for Greece in its struggle to bring its ballooning budget deficit under control and contain its debt crisis.
The Greek banking sector index dropped 3.5 percent.
MINERS RETREAT
Miners reversed from earlier gains as metal prices retreated, with copper down 2.5 percent and aluminium 2.2 percent lower.
Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata lost 1.3 to 3.1 percent.
However, energy stocks were in demand. Italy's Eni rose 2.2 percent after it posted forecast-beating fourth-quarter net profit on good upstream growth.
On the upside, investors stuck with the safety of defensive stocks.
Food producer Nestle gained 1.4 percent and drugmakers GlaxoSmithKline and Sanofi Aventis were up 1 percent and 1.3 percent respectively.
Looking at economic news, investor confidence also weighed after data showed the euro zone economic recovery stumbled in last year's final quarter as gross domestic product barely expanded.
"We are in a very volatile environment. It's purely a technical rally and if economic figures disappoint we are going to go down again. We will go one step forward and two steps backward," said Koen De Leus, economist at KBC Securities.
Across Europe, the FTSE 100 index fell 0.4 percent, Germany's DAX slipped 0.2 percent and France's CAC 40 lost 0.3 percent.
