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(Sharecast News) - Investors in European stock markets 'sold the rally' following the release of a weaker-than-expected reading on the US jobs market.
The non-farm payrolls report revealed an increase of just 22,000 in August (consensus: 75,000) and the accompanying revisions a decline of 13,000 in June - the first outright drop in payrolls since 2020.
The pan-regional Stoxx 600 index surrendered early gains, slipping 0.16% to 549.21, whilst Milan's FTSE Mib gave back 0.91% to 41,607.81 and Paris's Cac-40 was off by 0.31% to 7,674.78.
"There is still plenty of scope for September's traditional volatility to kick off, even with a Fed rate cut looming. Investors should remember that there are two types of rate cut - last September's was the good kind, taking place in a strengthening economy," said IG chief market analyst Chris Beauchamp.
"Today's market action suggests the next cut could be the other kind, designed to help support an economy that is already on a recessionary trajectory."
As well, France's Prime Minister was facing a no-confidence vote on 8 September.
Brent crude oil and longer-term euro government bond yields ended down while the euro was to be seen at 1.1742 versus the US dollar.
On the regional economics front, factory orders in Germany unexpectedly fell in July, declining by their most in six months, following a significant drop in transport orders.
Price-adjusted new orders in manufacturing fell by 2.9% in July after seasonal and calendar adjustments, according to the Federal Statistical Office (Destatis).
That was the third straight decline after a revised 0.2% decrease in June, missing the 0.5% increase expected by economists. This was the steepest fall since January.
In equity news, Hexagon shares surged 7% after the Swedish firm said it will sell its design and engineering unit to US-based Cadence Design for $3.1bn.
Temenos tanked 16% as the banking software group said chief executive Jean-Pierre Brulard was leaving with immediate effect.
Orsted inched up 3%, even after the Danish wind farm developer lowered its annual operating profit outlook.