* FTSEurofirst 300 drops 1.3 percent
* Nonfarm payrolls beat predictions, increase pressure on Fed
* Miners lead stocks lower as commodity prices fall
* Banks reverse early gains made after ECB, BoE
By Alistair Smout
LONDON, July 5 Miners and banks bore the brunt of a European stock market drop on Friday after a stronger than expected U.S. jobs report raised expectations that the U.S. Federal Reserve may soon start to slow its stimulus programme.
Sectors sensitive to changes in economic sentiment led the market lower, with the basic resources sector down 4.3 percent.
The pan-European FTSEurofirst 300 closed down 1.3 percent at 1,163.55, after non-farm payrolls beat expectations by 30,000 jobs, raising the prospect of an early end to the U.S. central bank's asset-buying programme.
Two weeks ago, Fed Chairman Ben Bernanke said the Federal Reserve expected to start cutting back later this year on the $85 billion in bonds it is purchasing each month if data remained encouraging.
The stimulus provided by central banks had fuelled stock markets to multi-year highs as recently as May, although the prospect of its withdrawal in the United States has seen the FTSEurofirst lose 7.5 percent since then.
Ed Woolfitt, head of trading at Galvan, said the data supported the argument for slowing the stimulus programme and meant the recent trend of good jobs data being bad for equity markets continued to hold true - suggesting that a return to more usual dynamics was some way off.
The falls came the session after the FTSEurofirst's biggest rise in 11 months, as the Bank of England and the European Central Banks both gave forward guidance that rates would remain low for an extended period of time.
ECB President Mario Draghi appears in front of the European Parliament on Monday, and may be pressed for further guidance, while the Eurogroup of euro zone finance ministers meets to discuss the latest tranche of Greek aid.
"We expect the U.S. market to remain robust, and what this does is put a fire under the heels of European policy makers to keep their foot firmly on the gas of reform," Lorne Baring. managing director of B Capital, said.
"They're driven by crisis, it would be good if they were driven by competition with the United States, for example."
The FTSEurofirst's biggest fallers were all commodity related, as concerns of the Fed's stimulus programme hit base and precious metal prices.
Glencore Xstrata fell 6.5 percent, the top faller, while copper miner Antofagasta and precious metal miners Fresnillo and Randgold all fell over 5.8 percent.
Banks also fell, closing down 1.4 percent and reversing early gains, as optimism over continued easy money after the ECB and BoE meetings dissipated after the U.S. data.