Jobs data pushes European shares to 1-week low

LONDON (Reuters) - European shares fell to their lowest close in a week on Friday, below a key resistance level after U.S. July non-farm payrolls were worse than expected.

Banking stocks fell, snapping earlier rises after the data, with the STOXX Europe 600 banks index down 1.2 percent. Dexia

lost 4.7 percent after the Franco-Belgian bank reported second-quarter revenue below forecasts.

The pan-European FTSEurofirst 300 index of top shares closed 1.1 percent lower at 1,056.75 points after being up as much as 1,076.14 earlier. However, the index still managed a 1.2 percent rise for the week.

The Euro STOXX 50, the euro zone's blue-chip index, slipped 1.4 percent to 2,779.34 points, below its 200-day moving average of 2,797.48 points and the 61.8 percent Fibonacci retracement of the index's fall from an April high to a May low at 2,805.95 points.

U.S. employment fell for a second straight month in July as more temporary census jobs ended while private hiring rose less than expected, pointing to an anaemic economic recovery.

"Non-farm payrolls were terrible and the revisions were even worse. They show the recovery is not yet complete," said Mark Priest, senior equities trader at ETX Capital. "There are fears of a double dip recession, that is why we are selling off."

Other banks also slipped LLoyds Banking Group, BBVA and Banco Santander were down 2 to 3 percent. On the upside Natixis gained 2.8 percent after the French bank had reported higher than expected quarterly results, driven by resilient investment banking revenue.

Shares in Danish brewer Carlsberg, which faces a sharp rise in input costs, lost 5.1 percent, while food companies such as Nestle fell 1 percent and Danone slipped 1.1 percent.

But the soaring grain prices, following Russia's move to temporarily halt shipments, helped push agrochemicals company Syngenta up 3.1 percent.

Shares in Old Mutual rose 0.7 percent after the financial conglomerate reported a better than expected jump in half-year profits and said it sold its U.S. life unit in a drive to simplify its structure.

"A good result from Old Mutual with profits much higher and the dividend reinstated. The group announced the disposal of its U.S. life operations ... which we expect the market to take positively," Shore Capital analysts wrote in a note, reiterating a "hold" recommendation on the stock.

Britain's Inmarsat gained 4 percent after it said it had made a $1.2 billion order for a new fleet of satellites to deliver high-speed broadband on a global scale after its second-quarter earnings beat market expectations.

Across Europe, the FTSE 100 index was down 0.6 percent, Germany's DAX was 1.2 percent lower and France's CAC 40 was down 1.3 percent.

The Thomson Reuters Peripheral Eurozone Countries Index

fell 0.6 percent.

(Editing by Greg Mahlich)