Europe stocks close lower after US jobs data
European equities closed down on Friday after a better-than-expected figure for nonfarm payrolls was released in the U.S., fueling investor speculation about the tapering of the Federal Reserve's stimulus measures.
The pan-European FTSEurofirst 300 Index provisionally closed down 0.2 percent at 1,294.32 points, although off earlier lows, as investor sentiment was curbed. The U.S. government's surprisingly good report on the labor market sparked speculation that the Federal Reserve could reduce stimulus before the end of the year.
European shares were also weighed down by France underperforming after a rating downgrade. The CAC 40 closed down 0.5 percent.
Job creation surged in October despite dimmed expectations from the impasse in Washington. There were a net 204,000 new jobs created for the month, though the unemployment rate rose to 7.3 percent. The numbers easily topped economist expectations of 120,000 new nonfarm payroll jobs for the month, though it matched estimates for a slight increase in the headline jobless rate.
U.S. stocks began higher on Friday, a day after the S&P 500 took its biggest hit in 10 weeks.
(Read More: Shutdown slowdown?Job creation soars in October)
European equities started the day in the red with French stocks feeling the strain. Ratings agency Standard and Poor's cut France's sovereign credit rating to AA from AA+ on Friday, citing lack of progress in government reforms of the country's economy.
(Read More: S&P cuts France's sovereign credit rating)
In Europe, meanwhile, the European Central Bank (ECB) on Thursday cut its main interest rate to 0.25 percent from 0.50 percent. The move follows a plunge in inflation to 0.7 percent year-on-year in October and a slowdown in manufacturing and services activity, combined with a strengthening euro. Stocks pushed higher strongly on Thursday afternoon, before events in the U.S. caused the rally to fizzle out.
The Bank of England also met on Thursday but left monetary policy unchanged. Investors are now looking ahead to the central bank's inflation report due out next Wednesday, with Governor Mark Carney likely to give an update on growth forecasts.
(Read More: ECB rate cut jolts markets, but is it the fix?)
Rolls Royce shares rise
In stocks news, insurer Allianz reported third-quarter net profit up 6.3 percent to 1.45 billion euros ($1.94 billion), slightly beating expectations of 1.41 billion euros from analysts polled by Reuters. Shares closed higher by 1.02 percent on Friday.
(Read More: Allianz sees 2013 operating profit above target)
Shares of carmaker Rolls Royce closed higher by 3.41 percent after reporting trading that was in line with expectations and promising results for its aerospace and defensive unit
The International Airlines Group announced that net profit more than doubled in its third quarter; shares provisionally closed up 7.99 percent.
Telecom Italia shares failed to start trading at the open on Friday after it unveiled plans to raise 4 billion euros in asset sales; shares, however, closed down 5.56 percent
Merlin Entertainments shares climbed to 334 pence from 315 pence as the U.K. tourist attraction operator saw its flotation on the London Stock Exchange Friday.
(Read More: Tussauds owner Merlin valued at $5.2 billion in IPO)
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