Europe shares resume rally; U.S. jobs data eyed

* FTSEurofirst 300 up 1 pct, Euro STOXX 50 up 1.5 pct
* FTSEurofirst 300 set to post 9th straight weekly gain
* Drop in volatility signals surge in risk appetite
* Bank index up 12 pct on the 'Draghi effect'
* Siemens soars after starting stock buyback programme

By Blaise Robinson
PARIS, Aug 3 (Reuters) - European stocks rose on Friday
morning, erasing most of the previous day's pull-back and
resuming a week-long rally as investors judged the European
Central Bank remains committed to bold action to fight the debt
crisis.
Markets were also awaiting U.S. jobs data that could fuel
expectations of further stimulus from the Federal Reserve.
At 0841 GMT, the FTSEurofirst 300 index of top
European shares was up 1 percent at 1,065.50 points, on track
for its ninth weekly gain in a row, extending its longest run of
weekly rises since mid-2005.
The benchmark index dropped 1.2 percent on Thursday after
European Central Bank President Mario Draghi disappointed a some
investors by announcing no immediate action to help lower the
borrowing costs of Spain and Italy.
"There was no 'bazooka' from the ECB as some had expected,
but sometimes the threat of action alone is very efficient. The
risk is on the upside now, no one want to short this market," a
Paris-based trader said.
The euro zone's blue chip Euro STOXX 50 index
was up 1.5 percent at 2,295.67 points. It lost 3 percent on
Thursday following Draghi's press conference, but with Friday's
recovery, it has risen 7 percent since Draghi said last week the
central bank was ready to do whatever it took to save the euro.
The index dipped in early trade on Friday, before bouncing
off the 50 percent Fibonacci retracement of its week-long rally.
Also helping the upbeat mood, Siemens surged
nearly 5 percent after the engineering conglomerate said it has
started a share repurchase programme worth up to 3 billion
euros, sparking hopes of further buyback plans across the
market.

RISK APPETITE RECOVERS
Euro zone banks also recovered after Thursday's sell-off,
with Societe Generale up 4.5 percent, Intesa Sanpaolo
up 6.1 percent and Deutsche Bank up 3.7
percent. The euro zone STOXX bank index has gained 12
percent since Draghi's comments.
The Euro STOXX 50 volatility index, Europe's main
gauge of equity market investor anxiety known as the VSTOXX
index, dropped 8 percent to a two-week low below 25, signalling
a surge in risk appetite.
But despite the brisk rally since last Wednesday, a number
of traders and fund managers remained cautious about the
market's direction over the next few days.
"Draghi is keeping investors in suspense, he's basically
winning time. But at some point, we need a clear plan, not just
threats, otherwise the market will remain very erratic," said
Alexandre Le Drogoff, fund manager at Talence Gestion, in Paris.
"I'm relatively cautious at this stage, and I see entry
points on the Euro STOXX 50 around 2,200 points, so I expect a
bit of consolidation now."
Around Europe, UK's FTSE 100 index was up 0.9
percent, Germany's DAX index up 1.5 percent, and
France's CAC 40 up 1.4 percent.
Later in the session, U.S. monthly jobs data is expected to
show non-farm payrolls rose 100,000 last month, according to a
Reuters survey, after gaining 80,000 in June.
A lower-than-expected figure could strengthen hopes the Fed
will launch additional stimulus measures, such as a third round
of asset purchases, to help boost the economy.