* FTSEurofirst 300 up 0.1 pct to 1,136.06 points * Euro STOXX 50 up 0.1 pct to 2,631.24 points * Traders see equity markets inching up before end-2012 * AkzoNobel surges on $1.1 bln unit sale plan By Sudip Kar-Gupta LONDON, Dec 14 (Reuters) - European shares edged up on Friday, lifted by chemicals stocks, and many traders expected equities to rise gradually before the year-end as the asset class offers better returns than cash or government bonds. Traders added that prospects of an eventual deal in the United States to avoid growth-curbing austerity measures, and new signs of economic growth in China, were also boosting sentiment towards equities. The pan-European FTSEurofirst 300 index inched up by 0.1 percent to 1,136.06 points, recovering from a 0.4 percent fall in the previous session and pushing the index back towards an 18-month high of 1,141.32 points reached earlier this week. The euro zone's blue-chip Euro STOXX 50 index also rose 0.1 percent to 2,631.24 points, while Germany's benchmark DAX advanced 0.3 percent to 7,607.73 points. Central Markets senior broker Joe Neighbour felt the DAX index could end 2012 at around 7,700 points at the very least. "Every minor dip is bought up pretty quickly afterwards," said Neighbour. "I can't really see any big sell-off between now and the end of the year. I expect the markets to continue to grind higher." AKZO GIVES CHEMICALS HIGH The STOXX 600 European chemicals index was the best-performing sector, rising 0.6 percent as Dutch group AkzoNobel surged 5 percent on plans to a sell north American unit to PPG Industries for $1.1 billion. Improved manufacturing data from China, where the HSBC flash purchasing managers' index (PMI) for December rose to 50.9, also offset lingering uncertainty over the outcome of budget talks to avert a "fiscal cliff" in the United States. The term refers to a combination of government spending cuts and tax rises that could hit the U.S. economy next year, but Tavira Securities head of trading Toby Campbell-Gray said investors were still buying equities before the year-end. The global financial crisis and euro zone's sovereign debt problems have led world central banks to slash interest rates to record lows. This has hit the returns on cash and government bonds, which offer less than equities' dividend payments. "Whether the equity market goes up, down or sideways, people are still looking to buy it. We've got institutions coming in, and they're net buyers, not sellers," said Campbell-Gray.