Europe close: Stocks in holding pattern ahead of US jobs report

European stocks wavered as a rebound in oil prices was offset by a reluctance to make bold moves ahead of Friday’s non-farm payrolls report, amid thinner volumes due to holidays in Europe.

The benchmark DJ Stoxx Europe 600 index edged higher by 0.23% to 332.86 while Germany’s DAX managed to eke out a gain of 0.24%.

France’s CAC 40 on the other hand was 0.11% lower to 9,851.86 by the closing bell.

At the same time, oil prices advanced as a wildfire near Canada’s oil-sands district threatened production. Fighting in Libya also helped to lift prices. West Texas Intermediate was up 2.41% to $44.86 a barrel and Brent crude was 1.98% firmer at $45.53.

“Nothing quite puts the buffers on market conviction like the hugely unpredictable US jobs report, due tomorrow. The shadow cast by tomorrow’s volatile payrolls figure was always going to cause hesitancy among traders who know only too well the impact a jobs report can have upon market sentiment and direction,” said Joshua Mahony, market analyst at IG.

Everyone of the last 11 recessions in the US had been preceded by a drop in US corporate profits per worker, with that ratio now down by 15% from the most recent peak reached in the second half of 2014, Jim Reid at Deutsche Bank pointed out in a research note sent to clients.

"Initial jobless claims are still very strong so we'd stress that there is no current evidence of such a trend. However given the usual lags, there is still plenty of time for employment patterns to change and the economy to move into recession if history is our guide," Reid added.

In corporate news, Spanish oil major Repsol rallied as its first-quarter adjusted net income beat analysts’ expectations.

BT Group was in the black after reporting a 9% rise in full-year adjusted pre-tax profit and unveiling a £6bn network upgrade programme for its newly-acquired EE business and Openreach infrastructure arm.

RSA Insurance was also higher after reporting a strong first quarter, with operating profit ahead of expectations.

Barclays nudged up after selling down its stake in its African subsidiary to 50.1% after a placing in South Africa.

Energy supplier Centrica was under the cosh after announcing a share placing to fund acquisitions and reduce debt.

Aerospace and defence group Rolls-Royce slid after saying it was on track to deliver expected cost savings, but that these would be significantly weighted towards the second half.