Europe close: Stocks recover as timing of Fed hike pushed back

European stocks managed to trim their losses on Friday as a weaker than expected reading on the state of the US jobs market led several of the world's largest brokers to push back their forecasts for the timing of the next interest rate hike from the US central bank.

US non-farm payrolls increased by 160,000 in April, moderately below the 200,000 person gain which analysts had penciled in. Furthermore, estimates for the previous two months of data were revised lower by a combined 19,000.

Close on the heels of that report, Bank of America-Merrill Lynch pushed out the timing of its rate-hike call to September, the same as Goldman Sachs.

The benchmark DJ Stoxx Europe 600 index finished lower by 0.36% or 1.19 points to 331.67, but Germany’s DAX managed to climb back into the green, ending the day up by 0.18% at 9,869.95 while France’s CAC was 0.42% lower.

"On net, the softening in April payroll growth, led by the service-providing sector, will likely raise concerns over the sustainability of US growth.

"We now only expect one rate hike in 2016, in September, down from two hikes previously, as we believe it will take longer for policymakers to accumulate sufficient evidence that economic and labor market activity is rebounding after a soft start to the year," Michael Gapen, Rob Martin and Jesse Hurwitz at Barclays said in a research report sent to clients.

"If the economy improves along the lines of our baseline forecast, there is risk of a second rate hike this year in December" they added.

In parallel, oil prices managed to claw back some of their month-to-date losses

West Texas Intermediate crude oil futures ended the day up by 1.66% to $45.07 a barrel and Brent crude was 1.66% higher at $45.77.

In corporate news, ArcelorMittal shares slipped after the steel giant reported a 33% drop in first-quarter profit amid falling prices.

Rio Tinto was in the green after the miner said it and its partners, the Mongolian government and Turquoise Hill Resources, have approved the next stage of development on the Oyu Tolgoi copper and gold mine.

Shares in InterContinental Hotels edged lower after it reported a slowdown in growth in the first quarter as weak oil markets and an earlier Easter hit Europe and the Americas.

EasyJet flew lower after it posted a rise in April passenger numbers but a drop in the load factor.

Man Group tumbled after Citigroup cut its stance on the stock to ‘sell’ from ‘buy’ , saying the shares were fully valued.