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Commods drag Europe stocks lower; await non-farm payrolls

Reuters - Thursday, July 2

LONDON, July 2 - European shares were lower in early trade on Thursday as investors took a cautious stance ahead of U.S. non-farm payroll figures, with commodities the biggest fallers tracking weakness in crude and metal prices.

By 0705 GMT, the pan-European FTSEurofirst 300 <.FTEU3> index of top shares fell 0.8 percent at 858.66 points after rising 1.8 percent in the previous session.

"The non-farm payrolls are probably not necessarily going to be good news. It is a lagging indicator so it is likely to continue to get worse before it gets better," said Justin Urquhart Stewart.

Energy stocks were the biggest losers after crude <CLc1> hovered around $69 a barrel following falls in the previous session.

BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total <TOTF.PA> were down 0.9-1.5 percent.

Miners were in the doldrums. Rio Tinto <RIO.L> slipped back 1.4 percent after its $15.2 billion rights offer. [ID:nSYD518726]

Later in the session, investors are likely to focus on the U.S. Employment report for June due out at 1230 GMT. Economists in a Reuters survey forecast that 363,000 jobs were lost in the month compared with a loss of 345,000 jobs in May.

In Europe, the European Central Bank is expected to keep euro zone interest rates unchanged, while investors will keep a close eye on ECB President Jean-Claude Trichet's press conference at 1230 GMT. [ID:nL1455465]


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