* FTSEurofirst 300 up 0.6 pct in first session of Q2
* Euro STOXX 50 up 0.7 pct, resistance looms at 50-day ma
* Bank of Ireland surges, Irish Life tumbles on bailout news
* U.S. monthly payrolls seen as double-edge sword
* For up-to-the-minute market news, click on [STXNEWS/EU]
By Blaise Robinson
PARIS, April 1 (Reuters) - European stocks rallied on their
first session of the quarter on Friday, as investors bet that a
strong reading of U.S. payrolls would eclipse recent jitters
over the euro zone debt crisis and violence in the Arab world.
The rally was paced by financial stocks such as Barclays
The cost of insuring senior financial debt also eased, with the Markit iTraxx senior financial index down 12 basis points to 139 basis points on Friday, while Europe's main fear gauge, the VDAX-NEW volatility index <.V1XI>, fell 4 percent to a one-month low of 18.8 points.
At 0854 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.6 percent at 1,132.01 points. The benchmark index ended the hectic first quarter with a tiny gain of 0.3 percent.
The euro zone's blue chip Euro STOXX 50 <.STOXX50E> index was up 0.7 percent at 2,932.15 points, moving toward its 50-day moving average at 2,950 points, a key resistance level.
"The market has been extraordinarily resilient in the face of all the recent shocks, which is a signal of strong inflows," said Jacques Henry, analyst at Louis Capital Markets in Paris.
"In the latest data we saw a bit of outflows on the short term, but I don't think the positive tide in favour of stocks is over."
Investors awaited the all-important U.S. monthly jobs data, due at 1230 GMT. Nonfarm payrolls are forecast to have gained 190,000 after adding 192,000 in February, which would be a strong signal that the labor market has turned the corner after lagging the broader economic recovery. [ID:nN30121489]
"The market's focus is moving back to the macro picture, and today's payrolls should be relatively strong," said Jean-Yves Dumont, head of asset allocation strategy and funds at Dexia Asset Management, which manages about 86 billion euros ($122.2 billion).
"But looking beyond it, the figure is a double-edge sword. Stronger-than-expected data will embolden the Fed's hawks," Dumont warned.
Irish financial stocks were in the spotlight, with Bank of
Ireland
Ireland's Finance Minister Michael Noonan also dropped a previous threat to impose losses on senior unsecured bonds in Bank of Ireland and Allied Irish.
"Everybody knew that the Irish banks needed additional capital ... But the most important thing is that there won't be any haircut on bonds," a Paris-based analyst said. (Reporting by Blaise Robinson; additional reporting by Alexandre Boksenbaum-Granier; Editing by Hans Peters) ($1=.7035 Euro)