* FTSEurofirst 300 gains 0.1 pct after Friday's 0.8 pct rise
* Utilities up as Germany to extend life of nuclear plants
* British Airways, Iberia rise on news eyeing 12 airlines
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, Sept 6 (Reuters) - European equities inched higher
in early trade on Monday, supported by utilities, with
encouraging U.S. jobs data on Friday easing concerns that the
world's largest economy could slide back into recession.
At 0843 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.1 percent at 1,064.67 points after
closing 0.8 percent higher on Friday and registering its best
weekly performance since early July.
Trading was thin as U.S. markets remained closed for a
public holiday. Volumes on the FTSEurofirst 300 were just 8.9
percent of its 90-day daily average.
"After a string of disappointing numbers, the data last week
provided an element of stability and helped increase risk
appetite," said Henk Potts, equity strategist at Barclays
Wealth.
"When you couple that with the outlook for corporates, it
looks pretty good."
Figures showed on Friday U.S. employment fell much less than
expected in August and private hiring surprised on the upside.
The latest macroeconomic numbers lessened concerns that the
economy risked sliding back into recession. []
Concerns about a double-dip recession had diminished
somewhat last week as data showed strength in U.S. manufacturing
and gains in consumer spending but the sluggish pace of growth
had kept investors on edge.
U.S. President Barack Obama will propose making permanent
the business tax credits for research in a bid to generate jobs
growth, Administration officials said. Other items that could
also be talked about by Obama are a payroll tax holiday,
extending tax cuts for the middle class and increasing money for
infrastructure spending and clean energy. []
Utilities shares topped the gainers list after Chancellor
Angela Merkel's coalition government agreed to a two-tier
extension of the lifespans of German nuclear power plants on
Sunday. []
The STOXX Europe 600 utilities index <SX6P> rose 1 percent,
while E.ON <EONGn.DE> and RWE <RWEG.DE>, two of the world's
largest utilities, advanced 2.5 percent and 2.2 percent
respectively.
Analysts, however, advised caution in choosing utility
shares.
"As summer moves into autumn and the leaves begin to fall,
the clouds hanging over the sector have not blown away, and
political risk remains very real," Martin Young, analyst at
Nomura, said in a note.
"We suggest that investors search for value, and we
highlight Centrica, E.ON, Iberdrola and Snam as top longs, while
on the short side we suggest Enel, Iberdrola Renovables and
Verbund."
TECHNICAL OUTLOOK
The Euro STOXX 50 <>, the euro zone's blue-chip
index, rose 0.2 percent to 2,751.46 points. The index stayed
above its 50 percent Fibonacci retracement of a fall to a low in
May from a high in April, seen as a positive sign.
The index faced resistance at around 2,782, its 200-day
moving average and further at 2,806, a 61.8 percent retracement.
British Airways <BAY.L> and Iberia <IBLA.MC> rose 0.5
percent and 0.4 percent respectively. BA Chief Executive Willie
Walsh said in Mumbai on Sunday the two companies have a list of
12 potential airlines to buy or merge with when their tie-up is
complete. []
BP <BP.L> was up 1.8 percent. It has revived the sale of its
Alaskan assets after failing to offload them to U.S. oil and gas
company Apache <APA.N> in July, the Financial Times reported.
GlaxoSmithKline's <GSK.L> was down 0.9 percent. British drug
regulators said on Monday that the company's diabetes drug
Avandia should be pulled from sale because of concerns about
heart risks. []
(Editing by Mike Nesbit)
