European stocks end lower as automakers, miners sag

European stocks fell yesterday, knocked lower by a sharp drop in mining shares that followed metal prices, while automakers retreated after a profit warning from BMW and GM's massive loss.

Irish drugmaker Elan plummeted 46 per cent as a second product setback in a week shattered confidence in its line-up of biotech medicines.

Investors were also rattled by poor US data that showed the unemployment rate hit its highest level in four years during July as employers cut non-farm jobs for a seventh straight month, though less severely than predicted.

The jobless rate climbed to 5.7 per cent from 5.5 per cent in June as 51,000 jobs were eliminated in July, bringing losses for the year to 463,000. Analysts polled by Reuters had expected 75,000 jobs would be cut last month but had forecast the unemployment rate would rise only to 5.6 per cent.

The FTSEurofirst 300 index of top European shares closed 1.4 per cent lower at 1,163.73 points. It ended the week with a loss of 0.5 per cent.

"The data is in line with what we saw in the previous months... the job losses are slightly lower than what we saw earlier this year, but the unemployment rate is getting worse," said Jean-Marc Lucas, economist at BNP Paribas, in Paris.