European shares fall sharply after U.S. jobs data

European shares fell sharply on Friday after U.S. jobs data were below expectations, with bank stocks among the worst performers led by Societe Generale on concerns over its derivatives operations.

The U.S. Labor Department showed payrolls rose by 431,000 in May, well below a forecast of 513,000 in a Reuters poll.

Banks took the most points off the pan-European FTSEurofirst 300 index, snapping the previous sessions gains.Societe Generale fell 6.7 percent, with traders citing concerns over the bank's derivatives operations but some added that the talk might be spurious.

A spokeswoman at SocGen said: "if we had something to say we would have said it."

By 1308 GMT, the pan-European FTSEurofirst 300 index of top shares was down 1.8 percent at 999.19 points.

"The sell off is on the back of the jobs number, throughout the week everyone had been expecting a better figure," said Giles Watts, head of equities at City Index said. "But the sentiment had begun to change throughout the day with the French bank rumour."

Markets were also spooked after a central banker said Hungary is still vulnerable to shocks due to its high debt and the country must base future growth more on domestic savings than external funding to make its economy sustainable.

Banks with exposure to eastern European countries were under pressure. No.1 emerging Europe bank UniCredit, Raiffeisen International and Erste Group Bank fell 5.6 to 6.2 percent.

BP gained 1.8 percent. The oil major said its cash flow was strong and there was no decision on its dividend.

Across Europe, the FTSE 100 index was down 1.6 percent, Germany's DAX was 1.6 percent lower and France's CAC 40 fell 2.4 percent.