* FTSEurofirst 300 index rises 0.5 percent
* Focus on U.S. jobs report, due at 1230 GMT
* Cyclical shares rally; banks, miners advance
By Atul Prakash
LONDON, Sept 7 (Reuters) - European shares extended gains to
hit a 13-month high on Friday, continuing to draw support from
the European Central Bank's bond buying plan unveiled in the
previous session, and with investors also betting on an
improvement in U.S. jobs figures due later.
Sentiment further improved after German exports unexpectedly
edged up in July and on news that China, the world's top
commodities consumer, approved 60 infrastructure projects this
week in a bid to boost the economy.
Cyclical sectors, which generally derive strength from an
improvement in economic activity, led the rally. Banks,
miners and construction shares rose 1.7 to 2.1
percent. French bank Natixis rose 4.7 percent.
Euro zone banks, up 3 percent, have shot up 47
percent since ECB President Mario Draghi said in late July the
bank was ready to take all the necessary measures to save the
euro. Spain's IBEX has surged 33 percent, while Italy's
FTSE MIB is up 29 percent.
At 0822 GMT, the FTSEurofirst 300 index was up 0.5
percent at 1,109.963 points after rising to a high of 1,113.22,
the highest since July 2011. The index climbed 2.6 percent on
Thursday after the ECB agreed to launch a new and potentially
unlimited bond-buying programme.
"I am positive on the market in the near term. You have got
the policy response coming through, valuations are still OK and
the macroeconomic backdrop isn't all that bad. These three
things add to the momentum in the market," Graham Bishop, equity
strategist at Exane BNP Paribas, said.
After the ECB's policy meeting on Thursday, focus has
shifted to the U.S. economic numbers. Expectations of a big rise
in U.S. non-farm payrolls numbers, due out at 1230 GMT, have
risen since data on private sector employment showed robust
growth for last month.
Although an encouraging jobs report would lower chances of
an aggressive easing step at the Federal Reserve's Sept. 12-13
policy meeting, investors would be happy to continue to buy
stocks on hopes of a gradual economic recovery, analysts said.
Charts painted a positive picture after recent price
movements and analysts said the euro zone's blue chip Euro STOXX
50 index, up 1.4 percent at 2,559.29 points, hovered
around a critical point.
"We need a weekly close above 2,500 to confirm a bullish
trend. If it is achieved, and given that the U.S. market is
making new highs as well, it would be very encouraging," Tim
Parker, technical analyst at Westhouse Securities, said.
He saw the index's medium-term resistance at 3,000.
Among individual movers, Xstrata rose 5.5 percent as
Glencore's $34 billion takeover bid for the miner
appeared to be back on after the commodities trader postponed a
shareholder meeting on Friday that had been expected to vote on
the faltering deal. Glencore fell 1.6 percent.
Glencore Chairman Simon Murray gave no details, telling
shareholders in Zug, Switzerland, only that there had been
"developments overnight", hinting at an improved deal.