Europe close: Stocks end lower ahead of monthly US jobs report

The benchmark Stoxx Europe 600 index closed down by 0.45% at 339.42 points while France’s CAC 40 slipped 0.2% and Germany’s DAX ended the day lower by 0.25%.

Milan's benchmark FTSE Mib was the lone exception among the Continent's leading gauges to end the day in the green, tacking on a gain of 0.78% to 18,348.50.

At the same time, oil prices were a tad lower, with West Texas Intermediate off by 0.23% to $34.58 a barrel and Brent crude down 0.30% at $36.78.

Euro area service sector purchasing managers' indices came in ahead of forecasts, but were nevertheless to be seen at multi-month lows in February.

The outturn in Thursday's US ISM services PMI was similarly mixed, coming in at a forecast-beating 53.4 (consensus: 53.1), down from 53.5 in the month before.

However, a sub-index linked to hiring trends in the sector underwhelmed analysts ahead of Friday's critical monthly jobs report.

"The big disappointment is the slump in the employment index to a two-year low of 49.7, from 52.1. At first glance that is a concern because it leaves the index consistent with monthly gains in services payrolls of only 50,000 per month. But we’ve seen this happen with the employment index before," Paul Ashworth, chief economist at Capital Economics said in a research note sent to clients.

For their part, analysts at UBS sent a note to clients pegging the risk of a recession in the US through the fourth quarter of 2016 at 23%. However, should certain risks continue to pester markets, that probability might rise to 49% with a view to 2017, they cautioned.

"If the themes of rising Chinese devaluation risks, lower oil prices, and tighter Fed policy (through a stronger dollar) continue in 2016, 2017 recession probabilities could rise to 49%. This could lead to a substantial downside for risky assets and a significant spike in volatility," UBS strategist Stephen Caprio said.

In corporate news, BHP Billiton was in the black after its part-owned Brazilian mining venture Samarco agreed a B$30bn ($8bn or £5.5bn) programme of compensation and clean-up from the bursting of a mine tailings dam last November.

Steelmaker ArcelorMittal was higher after its chief executive officer told Les Echos the company was not planning to cut its French production.

Insurer Admiral rallied after posting a forecast-beating 6% rise in 2015 pre-tax profit and lifting its dividend target.

Sportswear maker Adidas was weaker after reporting a slightly bigger than expected net loss for the quarter.

Evonik Industries shares tanked after the chemical maker issue a weaker-than-expected profit outlook.

Satellite communications provider Inmarsat slid after posting a drop in full year profit amid weak global government spending.

Back on the macroeconomic front, data from Eurostat showed retail sales in the Eurozone grew more strongly than expected in January.

Sales were up 0.4% on the month compared with a 0.3% gain in December and expectations of 0.1% growth.

On the year, sales rose 2%, which was higher than 1.4% the previous month and consensus expectations of 1.3% growth.

Pantheon Macroeconomics said it was “an upbeat report pointing to a good start to the year for Eurozone consumers”.

Elsewhere, Markit’s final Eurozone composite purchasing managers’ index for February fell to 53.0, which was above the flash estimate of 52.7 and January's 53.6 but marked the lowest reading since January last year.

Still, it was comfortably above the 50 mark that separates contraction from expansion.

The services PMI, meanwhile, came in at 53.3, up from the flash estimate of 53 but below January’s 53.6 and marking a 13-month low.

In Germany, the composite PMI fell to 54.1 in February from 54.5 in January, marking a five-month low.

In France, the composite PMI slipped to 49.3 from 50.2 in January, which was a 13-month low.