FTSE at fresh five-year highs with eyes U.S. jobs boost

* FTSE 100 up 0.4 percent, hits 5-yr high

* Investors bet on strong U.S. data, continued stimulus

* Schroders up as results trigger upgrades

By Toni Vorobyova

LONDON, March 8 (Reuters) - British equities nudged up to fresh 5-year peaks on Friday, with investors looking to U.S. jobs data to show improvement in the world's biggest economy without being strong enough end central bank stimulus.

With FTSE 100 companies generating around a quarter of their revenues in the United States, and with the Britain on the verge of its third recession in four years, the health of the U.S. economy is key for British corporate earnings.

The data, due at 1330 GMT, is expected to show a 160,000 rise in U.S. non-farm payrolls last month, signalling continued economic improvement. But the jobless rate is expected to remain at 7.9 percent, backing the case for continued stimulus from the U.S. Federal Reserve, which has signalled that it will keep short term interest rates near zero until unemployment falls to at least 6.5 percent.

"I have been quite sceptical (about equity gains) given how far valuations have gone and the lack of earnings support, but that seems to have been trumped by stimulus support," said Ian Williams, strategist at Peel Hunt.

"We would have to be running at least at 250,000 to start driving down the unemployment rate to the sort of levels the Fed is looking for, so I think we are still in the Goldilocks (not too hot, not too cold) scenario. Even if we get 200,000 we might get some profit taking but it probably won't frighten people too much."

The FTSE 100 was up 27.31 points, or 0.4 percent, at 6,466.47 by 1145 GMT, hitting fresh five-year highs and on track for its 10th consecutive month of gains.

A relatively strong 2012 earnings season has also helped the British market, with only 31 percent of FTSE 100 companies missing earnings expectations against 51 percent of the euro zone blue chips in the EuroSTOXX 50 index, according to Thomson Reuters StarMine data.

Strong results the previous session continued to benefit Schroders as the numbers translated into a run of analyst upgrades on ratings and price targets, lifting shares in the investment manager 2.3 percent.

Other top performers were high beta sectors like industrial metals and banks, boosted by broad strength in risk appetite ahead of the U.S. data, which pushed implied volatility on the FTSE 100 to six week lows.

"We've seen buying in cyclicals on pretty much every dip - particularly in the miners, where the additional volatility has attracted clients trading on a shorter-term timescale, given concerns over the sustainability of the rally against the weak macro backdrop," said Matt Basi, head of sales trading at CMC Markets.

Chinese data offered some support, with a surge in exports singalling an improvement in the global economy. However imports were unexpectedly weak. (Reporting By Toni Vorobyova. Editing by Jeremy Gaunt.)