* FTSEurofirst 300 down 0.2 pct, dips from 6-1/2 yr high
* Index set to post fourth weekly gain in a row
* Citi sees stocks as 'super cheap' relative to credit
By Blaise Robinson
PARIS, Sept 5 (Reuters) - European stocks dipped early on Friday, pausing after the previous day's sharp rally spurred by an interest rate cut from the European Central Bank which also launched new measures to support the euro zone economy.
Shares in BP fell 0.4 percent, adding to a steep sell-off after a U.S. judge decided that the firm was 'grossly negligent' and 'reckless' in the Gulf of Mexico oil spill four years ago. The ruling could add nearly $18 billion in fines to more than $42 billion in charges the company took for the worst offshore environmental disaster in U.S. history.
The stock is down about 6 percent since Wednesday's close.
At 0748 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,398.71 points, retreating from a 6-1/2 year high hit in the previous session.
Britain's FTSE 100 index was down 0.2 percent, Germany's DAX index up 0.1 percent, and France's CAC 40 down 0.1 percent.
On Thursday, the ECB cut its main refinancing rate to 0.05 percent from 0.15 percent and drove the overnight deposit rate deeper into negative territory, now charging banks 0.20 percent to park funds with the central bank overnight.
ECB President Mario Draghi also announced plans for an asset-backed securities (ABS) and covered bond purchase programme to help ease credit conditions in the bloc. Sources told Reuters it could amount to 500 billion euros ($650 billion) over three years.
Despite the day's dip, Judith Danan, head of sales trading at CMC Markets France, said clients are strongly buyers of France's CAC 40, Spain's IBEX and Italy's MIB .
"The market is cheering the new ECB measures. That said, there's no guarantee that this will be enough to boost the euro zone economy. It's going to take time to measure the impact on consumer spending and capital expenditure," she said.
The FTSEurofirst 300 - which is set to post a weekly gain of 1.9 percent, its fourth such gain in a row - has surged 8 percent since early August. Technical charts show the index close to 'overbought' territory, with its 14-day relative strength index at 69.7.
On the longer term, Jonathan Stubbs, equity strategist at Citi, saw further gains in European stocks in the coming months.
"European equities have returned 8 percent so far this year, recovering strongly from the recent summer sell-off as bad news - weaker macro data - has quickly become good news - more ECB liquidity," he wrote in a note.
"There has been a strong re-rating since mid-2012. European equities are now 17 times P/E, from 10 times then. No longer cheap in absolute terms, but still super cheap relative to other asset classes, such as credit."
U.S. monthly jobs data due later on Friday should give investors some insight on the outlook for U.S. interest rates.
The U.S. Labor Department is expected to report that non-farm payrolls rose to 225,000 in August, after rising 209,000 in July. The unemployment rate is expected to slip to 6.1 percent from 6.2 percent.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
Editing by Catherine Evans