European stocks mixed ahead of US jobs data

LONDON: European stock markets diverged on Friday with traders poring over key election and earnings results in Britain as they awaited key US employment data.

London's benchmark FTSE 100 index fell 0.28 percent to 5,903.11 points in late morning deals. Frankfurt's DAX 30 rose 0.60 percent to 7,420.63 points and in Paris the CAC 40 index grew 0.39 percent to 4,018.33.

The Stoxx 50 index of leading eurozone companies dipped 0.05 percent to 2,924.26 points.

Markets were nervous ahead of US non-farm payrolls data to be published at 1230 GMT.

Before then, economists were assessing the implications in Britain of a punishing defeat for the Liberal Democrats in local elections.

The junior coalition partners suffered huge losses across England in Thursday's vote, while Prime Minister David Cameron's Conservatives survived largely unscathed.

Lib Dem leader and Deputy Prime Minister Nick Clegg said his party had taken the brunt of the blame for the deep spending cuts introduced by the year-old coalition to rein in Britain's record deficit.

Citi banking group economist Michael Saunders concluded on Friday: "It will be another 2-3 years before the UK's fiscal deficit is back to tolerable levels... and if the coalition splinters before then, the UK's ability to return to fiscal sustainability will be very much in doubt."

In company news on Friday, Royal Bank of Scotland said that its net loss more than doubled to £528 million (594 million euros, $866 million) in the first quarter as the state-rescued bank was hit by bailout costs.

However the bank's improved underlying performance helped send its share price soaring six percent to 42.91 pence in London.

Elsewhere, recently-formed International Airlines Group gained 2.85 percent to 253 pence after the group combining British Airways and Spanish carrier Iberia announced a first-quarter net profit of 33 million euros ($48 million).

The profit after tax figure for the three months to March 31 compared with an estimated net loss of 243 million euros in the first quarter of 2010, IAG said in a results statement.

IAG, which was formed only in January, posted a profit after increasing capacity and slashing most costs. However it faced a 31-percent rise in fuel charges during the reporting period.