London - European stocks snapped their longest losing streak in six months on Friday, boosted by Swiss food firm Nestle as it sold its Givaudan stake, potentially freeing up more than a billion dollars for buybacks or acquisitions.

Traders expected indexes to stay within a tight range and volume to be subdued until US jobs data is published at 15:30 SA time.

This was expected to shed light on the state of the world's largest economy and, indirectly, on when the Federal Reserve's equity-friendly stimulus programme may be dialled back.

Nestle rose 1.5 percent, making it the single biggest contributor to the FTSEurofirst 300's rise, as it offloaded its 10 percent shares in fragrance and flavour maker Givaudan, worth 1.145 billion Swiss francs ($1.27 billion), fuelling bets it may use the money for share buybacks or bolt-on acquisitions.

“They don't need it and (shares) had a great rally so they might as well... make a better use of the capital, whether it's buying another business or buying back shares,” Nick Xanders, head of strategy at BTIG, said.

L'Oreal, in which Nestle owns a 29.5 percent stake, rose 3.1 percent.

The two stocks added nearly a point to the FTSEurofirst 300 index, which was up 4.26 points, or 0.3 percent at 1,265.56 points at 10:48 SA time.

This put the index on track to end a four-day slide, longest reversal since June.

The blue-chip Euro STOXX 50 index was up 0.2 percent at 2,958.75 points.

The FTSEurofirst 300 is down nearly 4 percent since hitting a 5-1/2 year peak in November.

It has been weighed down by concerns about a growth slowdown in the euro zone and the possible curbing of the Fed's asset purchase programme, which has driven investors out of low-yielding bonds into shares in the past year.

Recent US data has been generally strong, fuelling speculation the Fed may start cutting the quantitative easing programme (QE) earlier than March - the market's base case expectation - and possibly as soon as this month.

Non-farm payrolls are expected to have increased by 180,000 last month, down from October's gain of 204,000 jobs. The unemployment rate is forecast to slip a tenth of a percentage point to 7.2 percent.

“It all depends on this data,” BTIG's Xanders said.

“If it's over 200,000, there's a real risk that everyone gets their knickers in a twist and we go down further. If it's more like 175-180,000 I think people would be generally more positive.”

Justin Haque, a pan-European broker at Hobart Capital Markets, was buying into recent share price dips, betting the Fed was unlike to start cutting its programme before the new Fed's chairman, Janet Yellen, replaces Bernanke on February 1. - Reuters