European equity indexes fell for a third day on Friday, weighed by gloomy corporate outlooks and the prospect of United States jobs data, which is expected to shed light on the chances of an early end to the Federal Reserve's ultra-easy monetary policy.
While encouraging for the global economy at large, a strong United States employment report would strengthen the case for an early interest rate hike by the Fed, whose monetary largesse has helped fuel a nearly 40 percent rally in European equities over the past two years.
"I still think good data is good for the stock market in the long term because it means the global recovery is still on track," Farhan Ahmad, a trader at Tradenext, said. "Short term, however, we may see some reverberation in the stock market and some further weakening."
At 0724 GMT, the pan-European FTSEurofirst 300 index was down 0.4 percent at 1,344.22 points, falling for a third straight session. The euro zone Euro STOXX 50 index was down 0.3 percent at 3,106.17 points
The Euro STOXX 50 recorded its steepest monthly loss in over a year in July, falling 3.4 percent amid concerns about a Fed rate hike in light of strong U.S. GDP and labour costs data earlier this week, as well as geopolitical tensions in Ukraine and the Middle East.
U.S. non-farm payrolls, due at 1230 GMT, were expected to show 233,000 jobs were added last month, with the unemployment rate seen steady at 6.1 percent. Euro zone manufacturing data for July was due at 0800 GMT.
In the meantime, corporate updates did little to cheer up investors.
Shares in Vinci fell 8.7 percent as Europe's biggest construction and concessions company warned it expects a slowdown in the second half of 2014.
Arcelormittal, the world's largest steelmaker, fell 3.9 percent after it cut its forecast for earnings this year after lower-than-expected iron ore prices.
French telecommunications company Iliad SA dropped 10.9 percent, the biggest decline on the FTSEurofirst, after making a surprise offer for T-Mobile US Inc that set up a potential bidding war with Sprint Corp.
On the upside, Europe's second-biggest insurer, AXA, rose 2.7 percent after it reported a better-than-expected first-half net profit.