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Europe closes off lows; oil, US jobs in focus; Zurich down 9%

European markets closed lower on Friday in a choppy day of trade as investors reacted to a slide in oil prices and fresh jobs data from the U.S.

US jobs beat

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The pan-European STOXX 600 closed down 1.4 percent provisionally, close to a one-month low, despite an encouraging March jobs report. The benchmark was narrowly lower by 0.75 percent for the week.

The U.S. economy added 215,000 jobs in March, according to nonfarm payroll data from the Labor Department. And the unemployment rate nudged higher to 5.0 percent.

Investors will be looking to see what the latest figures mean for an interest rate hike from the Federal Reserve, though policymakers have signaled that an April rate rise is not likely.

"The prospect of those U.S. non-farm payroll figures had been weighing on sentiment with the key concern not the headline growth in new job numbers, but the fact that hourly wages would contract once again," Tony Cross, a market analyst at Trustnet Direct, said in an afternoon note.

"This proved not to be the case and although the initial reaction for equities on Wall Street might not have been all that positive, the idea that the U.S. economy isn't stumbling towards recession is certainly giving the London market a lift."

U.S. stocks were trading mostly higher at Europe's close on Friday.

Commodities slump

Oil and metal prices fell lower on Friday despite better-than-expected data from China overnight. Brent futures fell in London trade below $40 per barrel. The negative sentiment weighed on markets and sent the likes of Petrofac and BP lower.

And the luxury sector was in focus for investors after Barclays cut its price target for Richemont, the owner of the Piaget and IWC watch brands, sending shares in the Swiss firm lower. Swiss watchmaker Swatch Group finished in negative territory while the likes of Burberry and LVMH also finished lower.

Meanwhile, Standard and Poor's cut its outlook for the Chinese government's credit rating, which weighed on stocks with exposure to the world's second-largest economy. Overseas, stocks were mostly lower. Japan's Nikkei 225 plunged 3.55 percent Friday after the Bank of Japan's quarterly "Tankan" survey showed the headline index for big manufacturers' sentiment stood at plus 6 in March, missing expectations and down from plus 12 seen three months ago, according to Reuters.

On the data front in Europe, the euro zone's manufacturing sector looks to have improved in March but still remained weak, according to the closely-watched Markit Purchasing Managers' Index (PMI). The euro zone's March manufacturing PMI came in at 51.6 up from 51.2 in February.

Zurich Insurance tanks

In individual stock news, shares in Zurich Insurance finished over 9 percent lower after it was named in a Reuters report as a potential buyer of Old Mutual's Italian wealth management unit.

The board of Home Retail agreed to Sainsbury's £1.4 billion ($2 billion) takeover offer for the Argos owner. Shares of the latter fell lower. but managed to finish in positive territory.

Shares of German carmakers BMW, Daimler and Volkswagen, the owner of Audi, all closed lower after reports that Amazon is looking to take a stake in Nokia's HERE mapping system which the auto giants bought last year.

-Additional reporting by CNBC's Evelyn Cheng.


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