LONDON ( The Deal) -- European markets scaled back some of the prior sessions gains Friday morning through profit-taking, as traders waited for the latest U.S. nonfarm payroll figures and on the rise in average U.S. earnings. That's because too positive an outcome could push the Federal Reserve to raise interest rates sooner than the middle of the year, which is when the markets currently expect it to move.

In London, the FTSE 100 was down 0.48% at 6,539, while in Frankfurt the DAX was off 0.54% at 9,784. In Paris, the CAC 40 fell 0.61% to 4,234. Madrid's IBEX35 was down 2.58% to 9,854.

The big faller this morning was Spanish lender Banco Santander (SAN) - Get Report, which fell 10% after Thursday's decision by new executive chairman Ana Botin to raise 7.5 billion euros ($9.1 billion) via an accelerated book build. The new money will strengthen the capital ratio at the eurozone's biggest bank by market capitalization and bring it more into line with other big international banks. Botin, who took over at the helm after the death of her father Emilio last year, has also cut the dividend by two-thirds. The move has long been demanded by analysts, who felt the traditional rate of 0.6 euros championed by the late chairman was unsustainable, but is not likely to be welcomed by retail investors who may look to dividends for income.

In the U.K., housebuilders and supermarkets led the fall. A growing stream of data seems to signal the U.K.'s housing market rally is running out of steam. Among the latest figures: Construction output fell 2% month-on-month in November, when analysts had been expecting a rise of 1.2%. Builder Taylor Wimpey (TWODF) was down 5.2% at 125.9 pence, while rivals Persimmon (PSMMY) and Barratt Developments were down 4.48% to 1,470 pence and 4.07% to 436.20 pence.

Among the supermarkets, which were clawing back some of the gains made on Thursday's news of better-than-expected Christmas outcomes, the biggest faller was WM Morrison (MRWSY) , the country's No. 4 grocer. Morrison's was down 3.41% at 178.40 pence. But the real news was rating agency Moody's downgrade of the biggest retailer, Tesco (TSCDY) , saddling its debt with junk status. Tesco fell 1.72% to 205.65 pence.

But insurance company Catlin (CNGRY) was up 4.47% at 690 pence, after the Lloyds of London firm agreed to be taken over by U.S. rival XL Group for 2.8 billion pounds ($4.24 billion) in cash and shares.

In Asia, where the mood was more positive, Tokyo's Nikkei 225 closed up 0.18% at 17,197.73, while Hong Kong's Hang Seng index finished up 0.35% at 23,919.95.