* FTSEurofirst 300 up 0.1 pct in jittery trade
* Index posted biggest gain in 11 months on Thursday
* Any negative payrolls reaction likely short-lived - Saxo
By Toni Vorobyova
LONDON, July 5 European shares consolidated on Friday, with uncertainty ahead of key U.S. jobs data making investors reluctant to extend the previous day's rally that was spurred by pledges of continued stimulus from the ECB and Bank of England.
The FTSEurofirst 300 was up 0.1 percent at 1,180.64 points by 0747 GMT, after a jittery start.
The index rallied 2.4 percent on Thursday in its best showing in 11 months after the BoE and the European Central Bank both offered unprecedented forward guidance, signalling that they were in no hurry to withdraw stimulus.
Stronger-than-expected U.S. jobs data on Friday, though, could revive concerns about the Federal Reserve's plans to scale back its quantitative easing (QE) stimulus if the U.S. economy continues to show signs of recovery.
Equities could sell off if non-farm payrolls data, due at 1230 GMT, beats the consensus 165,000 new jobs, or if the U.S. jobless rate is below the forecast 7.5 percent.
"It's going to be an interesting day. Now we have anchoring into the future of lower rates from the ECB, so that will be positive for equity markets in that region. But non-farm payrolls are on the tap and ... if you get really good numbers then it will increase the probability of QE tapering before time, which could create a negative reaction in the short term," said Peter Garnry, head of equity strategy at Saxo Bank.
"But I only think that is a short-term potential reaction ... and equities could easily be 10 percent higher over the next 12 months, or even 15 percent higher," he added, saying markets would benefit from an improving global economic outlook.
A payrolls reading broadly in line with consensus would be consistent with a EuroSTOXX 50 level in the 2,660-2,675 area, according to Societe Generale's long-term fair value models, suggesting the euro zone index - last up 0.1 percent at 2,649.75 points - is actually slightly undervalued.
Technical charts also pointed to the scope for more gains.
"We got many new buy signals yesterday in stock market indices in Europe ... This time, the price breakout is technically significant and improves a short-term positive outlook," Jean-Charles Gand, senior market strategist at BBSP Research, said in a note.
To confirm the upwards trend though, EuroSTOXX 50 needs to move above 2,684 to close a gap left by its May-June retreat.
Banks - the most direct beneficiaries of ample central bank liquidity and access to cheap funds - were among the top performers for a second session, with Societe Generale up 2.2 percent.