Europe close: Stocks end lower despite solid US jobs report

European stocks fell on Friday as a largely in-line US non-farm payrolls report failed to lift investor sentiment, although it did succeed in boosting Fed rate hike odds for the central bank´s policy meeting on 14 December.

US non-farm payrolls increased by 156,000 in September, slowing slightly after the previous month´s upwardly-revised rise of 167,000.

Nevertheless, other aspects of the report such as the rise in the labour force participation rate and aggregate weekly hours led several economists to dub the report "solid".

Speaking to CNBC following the release of the figures, the president of the Federal Reserve bank of Cleveland, Loretta Mester, said: "When I see the labor market report today in the context of all the other labor indicators we've been getting, I think we're at full employment.

"I see that inflation measures are moving up. We have to be forward looking. So in terms of our two goals, I think it makes sense to move up the rate another 25 basis points."

Fed funds futures were assigning 70.2% odds to the chances of a Fed rate hike at its 14 December policy meeting.

In parallel, speaking from Washington DC European Central Bank chief Mario Draghi quashed any speculation that the monetary authority might be contemplating tapering its programme of quantitative easing.

However, weighing on sentiment surely was the ‘flash crash’ in the pound during Asian trading hours. As of 1758 BST, cable still lower by 1.27% at 1.2457, albeit well off its lows of the session.

Overnight, sterling had slid by as much as 6% to hit its lowest level since 1985 in Asian trade, with market participants speculating that it could have been the result of a faulty algorithm or ‘fat finger’ trade, with low liquidity also thrown into the mix. The plunge coincided with comments by French president Francois Holland, who said the EU should take a tough stance with the UK during exit talks.

Oil prices were lower heading into the Columbus Day weekend Stateside, despite reports that some OPEC members and Russia will meet next week to talk about Russia’s involvement in a joint production cut. West Texas Intermediate was down 1.346% at $49.77 a barrel and Brent crude was down 1.61% lower to $51.68.

On the corporate front, Deutsche Bank was a little firmer following a Financial Times report that the lender is working on a spin-off of its asset management business.

Dutch insurer Delta Lloyd was also in the black after it rejected a takeover bid from rival NN Group, saying it undervalues the company.

Germany utility E.ON was a high riser following reports that activist shareholder Cevian was mulling the possibility of taking a 10% stake in the company.

Pharmaceuticals giant AstraZeneca edged up after announcing that it sold its rights outside the US for nasal spray Rhincourt Aqua to Johnson & Johnson for $330m.

On the downside, easyJet flew lower again following Thursday’s profit warning, as Bank of America-Merrill Lynch downgraded the stock to ‘neutral’ from ‘buy’.