LONDON: European stocks ended a volatile session lower on Friday as investors digested data showing slowing jobs growth in the United States, but they still marked their best week in two months as fears of soaring inflation were tempered.
A US Labor Department report showed nonfarm payrolls increased by 194,000 jobs last month, compared with an expectation of 500,000. Although the headline number was a huge miss, analysts said excluding the seasonally adjusted factors, the number was not too disappointing.
The pan-European STOXX 600 index, which had fallen as much as 0.5%, only briefly reversed the earlier losses after the data.
"Payrolls data came in weaker than expected, but the overall trend of an improving labor market remains intact," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
While strong numbers could cement the case for the US Federal Reserve's withdrawal of its support for the economy, many analysts expect that even a second straight weak employment report may not be enough to hold back the central bank from announcing a slowdown of its bond purchases later this year.
"It doesn't look like today's figure comes anywhere close to the kind of scary figure that might provoke (the Fed) into swerving course at the last minute," said Chris Beauchamp, chief market analyst at online trader IG.
Oil and auto stocks led gains in Europe, but this was outweighed by tech stocks falling 1.4% as rising bond yields dimmed the high-growth sector's appeal.
The STOXX 600 rose 1% on the week as relief over a temporary lifting of the US debt ceiling and as easing fears of an energy crunch calmed rallying oil and gas prices which had triggered inflation worries.
UK travel stocks, including British-Airways owner IAG , Whitbread and Ryanair, gained between 0.4% and 1.6% with Britain set to scrap tough COVID-19 quarantine requirements for 47 destinations.
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