European shares end sharply lower, banks weigh

LONDON, Sept 5 (Reuters) - European shares closed sharply lower on Friday, tracking a sharp decline in U.S. stocks after weaker-than-expected U.S. non-farm payrolls data.

The FTSEurofirst 300 .FTEU3 index of top European shares was provisionally down 2.3 percent at 1,124.88 points after falling as much as 2.5 percent earlier in the day.

Banks and energy stocks were among the top-weighted losers, while Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz) fell nearly 10 percent after the world's top mobile phone maker warned it would lose market share this quarter as it refused to participate in a price war waged by some rivals to combat weak economies.

"The U.S. data, rather than providing an excuse for a bounce, has actually continued the gloomy mood ... New York has (also) continued its weakness," said Philip Isherwood, strategist at Dresdner Kleinwort.

The U.S. unemployment rate unexpectedly shot up to 6.1 percent in August, the highest in nearly five years, as employers cut payrolls for an eighth straight month and a decline in labor markets accelerated.

Analysts said the bleak hiring data showed a weakening economy that likely will oblige the Federal Reserve to keep interest rates low for an extended period. [ID:nN05415312] (Reporting by Atul Prakash)