European stocks closed sharply lower across the board Friday, dropping to their lowest level since April 23 after higher-than-expected U.S. unemployment data and as oil surged $5 per barrel while the U.S. dollar fell.
Shares in airlines -- sensitive to high oil prices – were among the most hit, with Air France-KLM down 6 percent, while exporters such as automakers got hammered as the euro rose against the dollar.
BMW shed 4.4 percent and Daimler fell 4.7 percent.
Royal Bank of Scotland fell 5.2 percent and was the heaviest drag on the index as its huge rights issue drew to a close and market talk churned about the outcome.
Sentiment was also weighed by hawkish comments from the European Central Bank on Thursday that opened the door to a rate rise next month.
"It's a fairly doldrums situations today on the market," said Franz Wenzel, strategist at AXA Investment Managers, in Paris.
"It's the aftershock of yesterday's remarks by Mr Trichet, that there's a fairly decent chance that he would go for higher interest rates."
Dutch supermarket group Ahold fell 3.3 percent despite posting in-line operating profits, with some analysts citing concern over profit margins at the company's Albert Heijn unit.
Irish banks Anglo Irish and Bank of Ireland were among top losers in Europe after Citigroup cut the stocks to "sell."
"People are realizing that there are still some headwinds as far as banks and financial institutions are concerned and that is weighing on the sector," Wenzel said of the European banking sector.
Elsewhere in Europe, Commerzbank shed 5.4 percent, Barclays dropped 7 percent and Societe Generale shed 3.5 percent.