Europe shares gain in early trade; jobs data eyed

* FTSEurofirst 300 .FTEU3 index rises 0.2 pct

* Banks rise

* Lafarge, L'Oreal drop after results

By Brian Gorman

LONDON, Nov 6 (Reuters) - Europe shares edged up in early trading on Friday ahead of a key U.S. employment report, with companies such as Royal Bank of Scotland (RBS.L) and British Airways gaining (BAY.L) after results.

At 0929 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.2 percent at 992.54 points.

The European benchmark is up more than 53 percent from its lifetime low on March 9, as investors have become more confident on the prospects for economic recovery.

Royal Bank of Scotland (RBS.L), majority-owned by the British state, rose 4 percent after it more than halved its operating loss to 1.5 billion pounds ($2.5 billion) in the third quarter as impairments fell. [ID:nL6671701]

Banking heavyweights which also rose included BNP Paribas (BNPP.PA), Banco Santander (SAN.MC), Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE), HSBC (HSBA.L) and UBS UBS.AG, up between 0.9 and 3 percent.

The European banking sector .SX7P was up 159 percent from the March low. U.S. stocks jumped on Thursday, with the Dow Jones industrial average .DJI closing above 10,000 for the first time in two weeks, as economic data boosted confidence in the recovery and strong results from Cisco Systems (CSCO.O) suggested a rebound in technology spending.

At 1330 GMT, investors' attention will switch to the United States, where key non-farm payrolls data is due. According to a Reuters poll, 175,000 jobs were lost in October, down from 263,000 in September.

"It's going to get tougher for the market to rise further as economic surprises lessen," said Bernard McAlinden, investment strategist, NCB Stockbrokers. "But a good labour report today could see the market testing post-recovery highs soon. Cisco showing top-line growth was a major factor. People already know about cost-cutting."

Across Europe, Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC-40 .FCHI were up between 0.1 and 0.2 percent.

LAFARGE FALLS

Two major French companies were lower after results.

The world's biggest cement maker, Lafarge SA (LAFP.PA), fell 2.9 percent after it was hit hard by the global recession in the third quarter as sales and profits slumped, but it said recovery would come to developed markets by the second half of 2010. [ID:nL5438380]

French cosmetics giant L'Oreal (OREP.PA) fell 2.4 percent after saying it saw no pick-up in consumer demand globally but expected improved trading in the fourth quarter. [ID:nL5541699]

But French luxury group Hermes (HRMS.PA) rose 2.7 percent after posting strong third-quarter sales, though it blamed weak currencies against the euro for an expected 5 percent drop in underlying profit this year. [ID:nL5586738]

British Airways (BAY.L) rose 6.8 percent. It swung to a first-half pretax loss of 292 million pounds, as business class passenger numbers continued to tumble. But broker BofA Merrill Lynch, which has a "buy" recommendation on the stock, says the latest data shows an encouraging trend in airline's traffic numbers and notes that the carrier sees premium class yields slowly improving. [ID:nL6071715] (Editing by Jon Loades-Carter)