London - European shares edged higher in early trade on Friday after gains in the United States and Japan but with traders cautious ahead of a key US labour market report.
At 08:27 GMT, the FTSEurofirst 300 index of top European shares was up 0.3% at 1 057.78 points, on course for a rise of more than 3% this week.
Data due at 12:30 GMT was expected to show US jobs data falling for a third straight month in August, hit by the fading boost from census hiring, the reluctance by companies to hire staff and the continued layoffs at cash-strapped state and local governments.
"People are watching the growth in (US) private-sector employment, which is likely to be too low to be good enough for the economy," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.
"The market is going up on relatively unconvincing economic data. It just needs to know there won't be a double dip. There's no competition from interest rates and bond yields." Energy companies were higher after crude prices closed above $75 in New York on Thursday, boosted by an oil platform fire in the Gulf of Mexico and Hurricane Earl's possible impact on East Coast refineries.
Total, Royal Dutch Shell and Statoil rose between 0.7% and 1%. BP was up 0.3%. It said the cost of dealing with its oil spill in the Gulf of Mexico had risen to $8bn and that it was a fortnight away from sealing the well for good.
In a broad market rise, the heavyweight banking sector was among the gainers. Barclays, Credit Agricole and Credit Suisse rose between 0.6% and 0.9%. Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC40 were all up 0.3%.
Roche rises
Swiss drugmaker Roche Holding rose 1.2% after saying it will cut costs to cope with recent setbacks on key drugs and rising pressures on prices from healthcare reforms.
UBS cut its year-end target for the pan-European index to 1 150 points from 1 250, the broker said in a note, though the new forecast is still a 9% upside from Thursday's closing level.
"If it becomes clear that a double-dip will be avoided (our central scenario), then the potential upside is significantly higher," UBS strategists said.
The European benchmark soared 62% between hitting a lifetime low in March 2009, and the end of the year. But it is up barely 1 percent in 2010 as investors worry about European debt levels and the strength of the economic recovery.
The Euro STOXX 50 rose 0.3% to 2 723.29 points, through a key resistance level of 2718, the 50% Fibonacci retracement from the July 20 to August 5 rally.
The index's next resistance level is 2 737, the 50% retracement of a fall from an April high to a May low.
Data on Friday provide a reminder of some of the problems faced by the eurozone peripheral countries. Activity in Spain's dominant service sector unexpectedly fell in August after five months of positive momentum, hit by a hike in value-added tax from July, a key survey showed.