European equities fell on Friday, with French stocks hit by a sovereign rating downgrade and broad sentiment weighed down by concerns that a strong U.S. economy may prompt an earlier scaling back of stimulus.

Following better-than-expected U.S. third quarter gross domestic product (GDP) numbers on Thursday, all eyes were on the 1330 GMT release of October non-farm payrolls report for clues on whether the world's biggest economy is strong enough to warrant a winding down of the Federal Reserve's equity-friendly stimulus programme.

The consensus is for just 125,000 new jobs to be added. According to Societe Generale's long-term fair value model, this would be consistent with EuroSTOXX 50 at 2,742 points and FTSE 100 at 6,527, suggesting that those markets are, respectively, 10 and 4 percent overvalued.

However, a strong number is more likely to be taken as a negative by equity markets than a weak one, given their reliance on continued central bank stimulus.

"There could indeed be a positive surprise in today's figures because we have seen strong ISM reports in the last couple of days and that means that possibly the private sector kept adding jobs at a quite decent rate. That could bring forward a little bit the taper discussion from March, where the consensus currently is," said Gerhard Schwarz, head of equity strategy at Baader Bank.

"That would be a drag on equities because it will reduce the incentive for investors to move from government bonds into equities."

FTSEurofirst 300 was down 0.7 percent at 1,287.86 points by 1125 GMT, wiping out its gains for the week and threatening to snap a four-week long run of weekly gains.

The French index was one of the worst performers, down 0.9 percent after Standard & Poor's cut France's sovereign credit rating by one notch to AA from AA+.

Individual stock fallers included luxury group Richemont , which missed revenue expectations.

"We needed to have confirmation (of economic recovery) in terms of corporate earnings and so far we don't have that confirmation and that's why I think the market is no longer going up," said Stephane Ekolo, chief European equity strategist at Market Securities.

With some 53 percent of European companies missing earnings expectations and 65 percent undershooting on revenues, the onus is on companies to show how they will improve in the future.

A strategy update and capital raising plans from Telecom Italia failed to convince investors, sending its shares down 6.7 percent.

"Telecom Italia's 2013-2016 outlook didn't include the 'extraordinary' measures investors were after in our view," analysts at Barclays said in a note. "Moreover, financial targets out to 2016E seem optimistic on our estimates, while our forecasts imply the company falls short of its 2016E adjusted net debt/EBTIDA target of 2.1 times."

Traders also said that some investors were switching out of the shares into a convertible bond that Telecom Italia issued as part of its capital raising.