European shares dropped on Friday amid risk-off sentiment driven by the prospects of higher interest rates and geopolitical tensions in Ukraine, while a few upbeat earnings capped losses.

The pan-European STOXX 600 fell 0.8%, on course for its fourth straight weekly decline, with autos and chemical stocks leading losses.

Luxury goods maker LVMH rose 2.5% after its fourth-quarter sales growth accelerated. Rivals Kering and Hermes ticked up 0.1% and 0.4%, respectively.

European shares shrug off Fed, defensives lead gains

Sweden's H&M gained 6.3% after the fashion retailer posted a bigger profit rise than expected for the September-November period.

Italy's UniCredit added 0.5% on better-than-expected full-year revenue and underlying profit, despite one-off hits under a new strategy by CEO Andrea Orcel driving a fourth-quarter loss for the lender.

Signify NV, the world's largest lighting maker, jumped 9.1% after reporting higher quarterly earnings.