EU stocks drop. [E]:

EU stock markets declined in the morning ahead of strong U.S. payrolls. Data can strengthen market's expectations on Fed will keep raising interest rates one more in August. Analysts expect 185,000 jobs have been created in June.

``Strong data will amplify anxiety on inflation and become additional argument for Fed in favor of continuation of rate hike. It will put pressure upon shares on both sides of Atlantic ", - said one of traders.

``The markets worry because of development situation with interest rates, - noted Ernst Conrad from Bayern Invest. If labor market's statistics will be better than forecasts, it will be bad for shares''.

``Strong data will cause inflation fears and can affect the Fed decision doesn't stop rate hike", - believes Matthew Bakland from CMC Markets.

British insurer Aviva stocks fell 2.5% after announcement of company management about negotiations for purchase of American competitor AmerUS Group Co.

Chipmakers Infineon, ASML and STMicro shares declined about 1% after Advanced Micro Devices warned that sales in Q2 will become below forecasts.

Software producer Business Objects SA also missed forecasts.

SAP's competitor shares fell 1.5%. Besides, EasyJet made 8% lift to 4-years high after it's annual operation profit was revised up.

EU chip makers Infineon Technologies AG and STMicroelectronics NV fell after American processors manufacturer Advanced Micro Devices Inc. signaled Q2 sales revenue will be below forecasts. Infineon dropped 0.9%, STMicroelectronics - 1.1%.