* FTSEurofirst rises but still set for weekly loss
* Markets boosted by China stabilisation, strong U.S. data (Updates prices)
By Sudip Kar-Gupta
LONDON, Jan 8 (Reuters) - European shares regained some ground on Friday, helped by a stabilisation in Chinese stocks and strong U.S. data, but persistent worries about China left the region’s markets facing heavy losses for the week.
The pan-European FTSEurofirst 300 index was up 0.5 percent going into the close of trading, recovering from a 2.3 percent decline the day before. It was still down about 5 percent so far this week - its biggest weekly drop since late August.
European stock markets climbed after data showed a surge in jobs growth in the United States, the world’s biggest economy.
Equity markets had received a lift earlier in the day as major Chinese stock indices rose, after regulators suspended the circuit breaker mechanism that halted trading twice this week. The shutdowns were blamed for exacerbating the sell-offs they were intended to limit.
Some investors said China’s ability to manage its markets has still been damaged. A fall in the yuan also raised concerns about a slowdown in China, the world’s second-biggest economy.
Yet Francois Savary, chief investment officer at Geneva-based Prime Partners, said the U.S. growth was strong enough to offset the worries about China. The U.S. data lifted the dollar against the euro, which again helped European stocks since a weaker euro typically benefits European exporters.
“The U.S. growth figures paint a more encouraging picture for the global economy,” said Savary.
Jonathan Stubbs, European equity strategist at Citigroup, said that although he expected European shares to rise this year helped by signs of an economic recovery in the region and higher corporate profits, markets would remain volatile.
Stubbs forecast the pan-European STOXX 600 index to end 2016 at 400 points, marking a gain of around 15 percent from current levels.
“We still expect equity returns to be driven by modest growth and some re-rating this year, but volatility is likely to remain near-term,” said Stubbs.
Today’s European research round-up (Additional reporting by Danilo Masoni in Milan; Editing by Larry King and Hugh Lawson)