European equities up on economic recovery hopes

* FTSEurofirst 300 up 0.5 percent

* Investors await U.S. non-farm payrolls data for direction

* Automobile shares feature among top gainers

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, March 4 (Reuters) – European shares rose on Friday
on growing optimism a key jobs report will show the recovery in
the United States, the world’s largest economy, gathering
momentum.

Automobile shares were among the top gainers, with a sector
index (.SXAP: Quote, Profile, Research) rising 1.5 percent on hopes of improving demand.
Daimler (DAIGn.DE: Quote, Profile, Research) rose 1.7 percent.

A signal by the European Central Bank on Thursday it may
raise interest rates as early as next month hurt some banks in
peripheral euro zone countries, while a rebound in crude oil
prices on tensions in Libya prompted investors to stay cautious.

At 0925 GMT, the FTSEurofirst 300 (.FTEU3: Quote, Profile, Research) index of top
European shares was up 0.5 percent at 1,162.20 after gaining 0.2
percent on Thursday.

The U.S. jobs report, due at 1330 GMT, was expected to show
employers hired more workers in February than in any month since
May. Nonf-arm payrolls rose 185,000, according to a Reuters
survey, after 36,000 jobs in January.

“It is always dangerous to depend too much on such a
volatile series of data. The jobs report does come against still
challenging conditions in the Middle East and a positive set of
numbers would certainly be well received by the market,” said
Keith Bowman, equity analyst at Hargreaves Lansdown.

Economists said the U.S. Federal Reserve will want to see
payroll gains in excess of 200,000 for at least 6-9 months and a
significant decline in unemployment before starting to withdraw
its monetary support from the economy.

JOBS IN FOCUS

A fund manager said the investment focus had shifted to
economic fundamentals from geopolitical tensions in Libya.

Libyan rebels calling for air strikes to set up a “no-fly”
zone came under attack by warplanes for a third day on Friday as
Muammar Gaddafi tried to loosen the opposition’s expanding grip
on a key coast road. [ID:nLDE72300M]

Crude oil prices (LCOc1: Quote, Profile, Research) rose 1 percent to hover above $116
a barrel on concerns the crisis could spread to other oil
producers in the Middle East.

“The markets only seem to be able to concentrate on one or
two things at a time,” said Richard Greenwood, fund manager at
Bedlam Asset Management, referring to U.S. jobs data.

“The economic data is getting better for the developed world
and corporates are generally cash rich. I am still positive
about the equity market and think that equities are a better
place than bonds.”

Across Europe, Britain’s FTSE 100 (.FTSE: Quote, Profile, Research), Germany’s DAX
(.GDAXI: Quote, Profile, Research), France’s CAC 40 (.FCHI: Quote, Profile, Research) rose 0.7-1.1 percent, but
Spain’s IBEX (.IBEX: Quote, Profile, Research), up 0.4 percent, underperformed on concerns
that higher lending rates would hit a fragile recovery in the
highly indebted country.

Spanish lenders were under pressure, with Bankinter (BKT.MC: Quote, Profile, Research)
down 0.3 percent and Banco de Valencia (BVA.MC: Quote, Profile, Research) down 0.2
percent.

Among individual movers, the world’s largest advertising
firm WPP (WPP.L: Quote, Profile, Research) fell 1.8 percent, with analysts saying its
strong results lagged those of French rival Publicis (PUBP.PA: Quote, Profile, Research).

“Publicis shot the lights out with fourth-quarter organic
growth of 12.5 percent, so there is relative disappointment,”
said Simon Baker, analyst at Credit Suisse.
(Reporting by Atul Prakash; Editing by Dan Lalor)