Britain's FTSE gets commodity boost ahead of U.S. jobs data

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

* FTSE 100 up 0.8 percent

* Oil majors lead index higher

* U.S (Other OTC: UBGXF - news) . jobs watched for Fed clues

* Marks & Spencer (Other OTC: MAKSF - news) falls on downgrade

By Alistair Smout

LONDON, June 3 (Reuters) - Britain's top share index rallied on Friday, boosted by a rebound in commodity-related stocks, with investors focused on a U.S. jobs report due later in the day.

Energy and mining shares rallied 1.7 percent and 1.3 percent respectively, buoyed by a rebound in oil and copper prices.

Brent crude rallied beyond the $50 a barrel level, and was near 7 month highs, proving resilient to an OPEC meeting which produced no agreement on a supply ceiling. Investors took heart from Saudi Arabia's pledge not to unleash new supply onto the market, as well as a fall in U.S. crude supply.

Oil majors BP and Shell (LSE: RDSB.L - news) were up 2 percent and 1.5 percent respectively.

"The perkiness of its commodity sector (is) the main driver of growth this Friday... despite another display of OPEC's ineffectiveness on Thursday," Connor Campbell, financial analyst at Spreadex, said in a note.

Britain's FTSE 100 was up 50.02 points, or 0.8 percent, at 6,235.63 by 0820 GMT, set for its biggest gain in more than a week.

The rise took it through several moving-average levels, which traders said was a sign of technical strength.

"The FTSE is gathering positive momentum after having broken the 200-hour moving average on the upside at the open," Ipek Ozkardeskaya, market analyst at London Capital Group, said.

Traders were focussed on the U.S. non-farm payrolls report, due at 1230 GMT.

Employment growth should be strong enough to confirm a tightening labour market and push the Federal Reserve closer to raising interest rates soon, with an expected 164,000 jobs added in May.

Financial markets see a small chance of a rate increase at the Fed's June 14-15 policy meeting, but are pricing in a roughly 59 percent probability at the July gathering.

"A soft NFP read will certainly push the Federal Reserve (Fed) hawks aside and further weigh on the US dollar. Only a print above the 200,000 level could bring the possibility of a June hike seriously back on the table," LCG's Ozkardeskaya said.

Among fallers, Marks & Spencer fell as much as 2.5 percent after JPMorgan cut the retailer to "underweight" from "neutral".

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

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Mike Dolan, Markets Editor EMEA. (Editing by Alexander Smith)