Photo illustration shows two euro coin through a magnifying glass near a picture of German share trading DAX index
A two euro coin is seen through a magnifying glass near a picture of German share trading DAX index at Frankfurt's stock exchange, in this photo illustration taken in Rome August 8, 2011. REUTERS

European markets fell Friday as investors maintained a cautious mode waiting for the outcome of the European Council summit that concludes in Brussels later in the day.

The French CAC 40 index was down 0.05 percent or 1.85 points to 3533.33. Shares of Alstom SA fell 1.48 percent and those of GDF Suez declined 1 percent.

London’s FTSE 100 index marginally fell 0.05 percent or 2.92 points to 5914.13. Shares of Aggreko Plc declined 7.91 percent and those of Bunzl Plc were down 3.33 percent.

Germany’s DAX 30 index was down 0.23 percent or 17.26 points to 7419.97. Shares of Bayer AG fell 0.63 percent and shares of RWE AG declined 0.63 percent.

Spain's IBEX 35 was down 0.40 percent or 32.40 points to 8067.90. Shares of Bankia SA fell 6.02 percent and those of Acciona SA dropped 1.14 percent.

Investors continue to focus on the two-day EC summit which is expected to announce measures to bring down the borrowing costs faced by the euro zone economies. On Thursday, the EU leaders agreed to put in place a single supervisor for banks in the euro zone to prevent any further failures of the banking system.

“We give our finance ministers the ambitious task of establishing a legal framework (for supervision) by Jan. 1, 2013. This banking supervision will then be built up in the course of 2013,” said German Chancellor Angela Merkel on the mechanism for the bank supervision.

Meanwhile, speaking about the euro zone debt crisis, French President Francois Holland said that they were on track to solve the problems that for too long have paralyzed the euro zone and made it vulnerable.

However, some observers reported about the fresh clashes over the key issue of the banking union, especially between Hollande and Merkel.

Meanwhile, Hollande stressed that France and Germany had a common responsibility to bring the euro zone out of the crisis.