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European markets end volatile day to the downside

European markets ended a volatile day to the downside on Friday, as markets saw US economy lose jobs last month for the first time in over two years -- a decline that was still less than many had feared.

The German DAX 30 closed down 0.2 percent at 5,007, while the French CAC-40 index also shed 0.2 percent to 4,528. The UK's FTSE 100 finished down 0.2 percent at 5,362.

Shares swung as investors sorted out the US jobs figures. Reeling from two hurricanes, nonfarm payrolls fell by an estimated 35,000 in September -- but much less than the 150,000 economists expected.

US stocks traded modestly higher on the data, which showed the resilience of the economy after Hurricanes Katrina and Rita, but fed fears that interest rates will need to rise further to contain inflation.

Both the US and European markets have sustained losses over the past few days, mostly because of inflation worries and fears for the course of interest rates.

M&A news stole the spotlight as British oil giant BP said it will sell Innovene, its petrochemical subsidiary, to UK-based Ineos for US$9 billion in cash. Shares closed up 0.2 percent in London.

Support also came from Anglo-Dutch conglomerate Reckitt Benckiser. It added 1.9 percent in London after agreeing to buy the over-the-counter medicines business of health and beauty retailer Boots PLC.

Boots shares added 1.9 percent after it signed the cash deal valued at £1.9 billion (US$3.42 billion) and said it plans to return £1.43 billion to shareholders in the form of a special dividend.

"Reckitts' are paying a top whack for Boots Healthcare International after Bayer, Novartis and GlaxoSmithKline backed off," said analysts at Dryden Wealth Management.

British supermarket J Sainsbury rose 1.3 percent after reporting a 4.1 percent increase in second-quarter comparable sales, or by 2.8 percent excluding fuel. Dresdner Kleinwort Wasserstein upgraded the company to hold from reduce.
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