By Sitaraman Shankar
LONDON, June 6 (Reuters) - European shares rose in early
trade on Friday, joining a global equities bounce as commodity
shares led the way and investors geared up for key U.S. non-farm
payroll numbers.
At 0830 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.7 percent at 1,318.73 points, snapping
a two-day losing run and shrugging off hawkish comments from the
European Central Bank on Thursday that opened the door to a rate
rise next month.
A sharp rise in oil overnight fuelled 1.5-2.3 percent jumps
in index heavyweights Total <TOTF.PA>, Royal Dutch Shell
<RDSa.L> and BP <BP.L>, making them the top points contributors
to the FTSEurofirst index.
Miners also rose, driven by higher metal prices. Rio Tinto
<RIO.L> rose 2.2 percent and BHP Billiton <BLT.L> gained 3
percent.
On a thin day for corporate news, U.S. monthly non-farm
payrolls data due at 1230 GMT were investors' main focus.
"(U.S. Federal Reserve Chairman Ben) Bernanke can't cut
rates further and has run out of ammunition. A weak non-farm
payroll number will underline the fact that expectations of
corporate returns in the United States are too high," said
Justin Urquhart Stewart, investment director at Seven Investment
Management.
Analysts expect the data to show that 58,000 jobs have been
lost in May, adding to mixed signals about the U.S. economy.
Adidas <ADSG.DE> was among prominent German gainers with a
1.4-percent rise after its chief executive was quoted by a
newspaper as saying that the group had already achieved 80
percent of its 2008 sales goals.
But Dutch supermarket group Ahold <AHLN.AS> fell 2 percent
despite posting in-line operating profits, with some analysts
citing concern over profit margins at the company's Albert Heijn
unit.
Irish banks Anglo Irish <ANGL.I> and Bank of Ireland
<BKIR.I> were among top losers in Europe after Citigroup cut the
stocks to "sell".
ECB RIPPLES
The European Central Bank spooked some investors on Thursday
by saying it may raise rates soon against a backdrop of rising
inflation pressures, though it kept rates on hold at its
meeting.
While the U.S. Federal Reserve has cut rates by 2.25
percentage points this year in an attempt to prevent a credit
market crisis from poisoning the wider economy, the ECB's hands
have been tied by price concerns.
European shares fell soon after the ECB comments at a news
conference on Thursday but ended the session only 0.2 percent
lower, helped by acquisition activity in the telecoms sector.
"I wouldn't read anything into short-term volatility in
these markets," said Roger Noddings, UK Chief Investment Officer
at HSBC Investments.
"Investors will take the ECB's comments with a pinch of salt
-- it would be really perverse if the ECB raised rates now. Six
months down the line the inflation outlook will improve but the
growth outlook will not," he said.
Across Europe, Britain's FTSE <> was up 1.1 percent,
Germany's DAX <> up 0.6 percent and France's CAC <>
up 1 percent.
Airline stocks, which benefited earlier in the week from
weakness in oil, were top losers in Germany, the UK and France
as oil gained. Lufthansa <LHAG.DE> fell 1.9 percent, British
Airways <BAY.L> lost 3.7 percent and Air France-KLM <AIRF.PA>
lost 2.7 percent.
(Additional reporting by Patrizia Kokot; Editing by David
Cowell)
