(Updates with closing prices)
* FTSEurofirst 300 closes up 0.5 pct
* Lisbon bourse up 2.1 pct before weekend election
* Weak U.S. jobs data pushes stocks down off earlier highs
* Volkswagen loses more ground, faces French probe
By Sudip Kar-Gupta
LONDON, Oct 2 (Reuters) - European shares closed higher on Friday, as firmer utility stocks and gains on the Lisbon bourse before weekend elections in Portugal propped up markets in spite of weak U.S. jobs data.
However, Volkswagen fell 4.3 percent to around its lowest level in four years as a French investigation added to pressure from a scandal over the carmaker's diesel emissions.
The pan-European FTSEurofirst 300 index closed up 0.5 percent, while the euro zone's blue-chip Euro STOXX 50 index finished 0.6 percent higher.
Consultinvest fund manager Enrico Vaccari said European equities would remain supported by economic stimulus measures from the European Central Bank.
"The market is trying to find its equilibrium and I believe it's almost reached it. Thinking strategically, European stocks have never been so interesting," he said.
Portugal's PSI-20 index was the best-performing market in Europe, climbing 2.1 percent as Portugal's prime minister made a final push on Friday to boost his chances of not only winning this weekend's election but also of securing an absolute majority and a more stable government.
Prime Minister Pedro Passos Coelho's campaign has focused on his record of guiding Portugal through the euro zone debt crisis and returning it to growth, and his Social Democrat-CDS-PP coalition looks set to be returned to power.
German utilities RWE and E.ON were also among the best performers, both climbing more than 6 percent after Societe Generale upgraded RWE to "hold" from "sell."
The FTSEurofirst had been up by about 1.5 percent before the U.S. data was released but then lost some of that ground after the figures came out.
U.S. employers' hiring stalled over the last two months and wages fell in September, raising new doubts that the world's biggest economy is strong enough for the Federal Reserve to raise interest rates by the end of this year.
Worries over a slowdown in China, the world's second-biggest economy, have also contributed to driving down European stocks in the last three months, pushing them close to their 2015 lows.
Nevertheless, traders such as Logic Investments' Harry Shann said the backdrop of the ECB's monetary support would ensure that dips in the stock market would attract buyers.
Today's European research round-up (Additional reporting by Danilo Masoni and Alasdair Pal; Editing by Louise Ireland/Ruth Pitchford)