European shares boosted by confidence on recovery

* FTSEurofirst 300 up 0.5 percent

* Confidence gathers pace after encouraging U.S. jobs data

* KBC falls as it takes additional hit on Ireland

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Harpreet Bhal

LONDON, Jan 6 (Reuters) - European shares were higher late on Thursday morning, on growing confidence the economic recovery was on a stronger footing after U.S. employment figures pointed to a pick-up in the labour market.

By 0943 GMT, the pan-European FTSEurofirst 300 <.FTEU3> index of top shares was up 0.6 percent at 1,148.83 points, after closing flat on Wednesday.

Technology shares were higher, led by a 8.7 percent gain in ARM Holdings after Microsoft , the second-largest U.S. technology firm, said it plans to design a Windows operating system compatible with chips designed by the British firm. [ID:nN05285026]

Within the sector, STMicroelectronics , Logitech and Nokia rose 2 to 2.5 percent.

The banking sector was generally higher, with the STOXX Europe 600 banking index <.SX7P> up 0.5 percent, though some concerns over euro zone debt troubles persisted after KBC said it suffered more hefty losses from bad loans at its Irish business. The stock fell 3.1 percent. [ID:nLDE70507R]

Investors' confidence was boosted by a jump in the ADP private payrolls on Wednesday to nearly triple the forecast, prompting economists to hike their estimates for Friday's crucial U.S. non farm payrolls.

"The data that we have seen up to November has been pretty solid but one thing that has been lagging is the employment market in the U.S. and there is a feeling that to really underpin the recovery, the job market needs to turn around," said Giles Watts, head of equities at City Index.

"If we start seeing signs of a turnaround in the job market, that really underlines that the recovery is under way and that is what we need," Watts said.

Non farm payrolls on Friday were expected to show overall gains of 175,000 jobs for December -- up from 140,000 prior to the ADP data.

COMMODITIES GAIN

Commodity shares were on the rise, as crude prices held above $90 a barrel and metals prices edged up as hopes of a sustained recovery in the United States.

"The miners are having another good day as commodity prices are higher. It seems like there's a lot of good news out there on the economy," a London-based trader said.

BP rose 2.2 percent, shrugging off a scathing report by the White House which said the oil major and its partners made a series of cost-cutting decisions that contributed to the Gulf of Mexico oil spill. Transocean was up 3.2 percent.

In the mining sector, Eurasian Natural Resources , Vedanta Resources and Xstrata added 1.9 to 2.1 percent.

Individual movers included Dutch car maker Sypker , which rose 8 percent after it reported a 129 percent jump in fourth quarter sales at its premium Swedish brand. [ID:nLDE70503K]

Germany's Bayer rose 2.3 percent after Equinet upgraded its rating on the drugs and chemicals group to "buy" from "hold".

Italian cablemaker Prysmian added 1.8 percent as it got a head start in the race with China's Xinmao to take over Dutch peer Draka after receiving the green light from regulators to press ahead with its bid. [ID:nLDE7031EO]

Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> rose 0.4 to 0.6 percent. (Editing by Mike Nesbit)