* FTSEurofirst 300 closes up 0.8 pct at 1,300.11 points
Euro STOXX 50 rises 0.9 pct to 3,038.49 points
* Upbeat Arcelor outlook lifts mining stocks
* U.S. jobs data worse than forecast
* Buy equities on dip -Sunrise Brokers' strategist
By Sudip Kar-Gupta
LONDON, Feb 7 (Reuters) - European shares extended their rebound on Friday from last month's losses, helped by mining stocks, as long-term investors bet equities would continue to benefit from the region's gradual economic recovery.
Equity markets briefly pared gains after worse-than-expected U.S. employment data, but then swiftly recovered as traders and investors said the longer-term outlook of a slow global economic pick-up remained intact.
The pan-European FTSEurofirst 300 index closed up 0.8 percent at 1,300.11 points, while the euro zone's blue-chip Euro STOXX 50 index also advanced 0.9 percent to 3,038.49 points.
Europe has shown signs of slowly recovering from the effects of the euro zone's sovereign debt crisis from 2011-2012, and steelmaker ArcelorMittal on Friday forecast that an increase in European iron ore production would lead to higher profits this year.
ArcelorMittal's upbeat outlook boosted mining companies, with the STOXX Europe 600 Basic Resources Index - which contains major mining stocks - outperforming the broader market rise with a 1.6 percent gain.
According to Thomson Reuters analysis, out of the 70 companies on the pan-European STOXX 600 index to have reported fourth-quarter earnings so far, 51 percent have posted earnings above analyst estimates.
"BACK ON TRACK"
"The bulls think we're back on track," said Darren Courtney-Cook, head of trading at Central Markets Investment Management.
Investors also focused on the fact that even though U.S. employers hired far fewer workers than expected in January, the U.S. unemployment rate dropped a tenth of a percentage point to 6.6 percent last month, the lowest since October 2008.
Some analysts added that while the U.S. jobs report was unlikely to sway the Federal Reserve from continuing to make reductions in its bond purchase programme, the longer-term view of a U.S economic recovery was intact.
"The headline payroll figure is quite soft, probably due to the bad weather last month, but the trend of the jobless rate is intact, and that's a pretty good indication that the U.S. economy is back on track, so overall it's positive for the market," said David Thebault, head of quantitative sales trading at Global Equities.
Chris Mellor, equity strategist at London-based Sunrise Brokers, said equities remained the best asset class compared to bonds or cash, where returns have been hit by record low interest rates set by major world central banks.
Mellor also advocated using the recent dip in global equity markets to add to positions.
The FTSEurofirst 300, which rose 16 percent in 2013, fell nearly 2 percent in January due to fears of a slump in emerging markets economies and a possible slowdown in growth in China.
However, Mellor felt an improvement in manufacturing data in Europe remained supportive of a slow move higher on European equity markets.
"The economic backdrop remains supportive. The sell-off offers an opportunity to buy equities," he said.