Europe shares extend post-ECB rally, look to U.S. jobs data

* FTSEurofirst 300 up 0.4 pct, Euro STOXX 50 up 0.5 pct

* Euro zone peripheral indexes lead the rally

* Volatility index tumbles to 2007 levels

By Blaise Robinson

PARIS, June 6 (Reuters) - European stocks extended their rally on Friday, spurred by the European Central Bank's fresh measures to boost the region's recovery and as investors anticipated positive U.S. jobs data later in the session.

By 1100 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,385.13 points. The euro zone's blue-chip Euro STOXX 50 index was up 0.5 percent.

The FTSEurofirst hit a 6-1/2 year high on Thursday after the ECB cut interest rates, launched a series of measures to pump money into the euro zone economy and pledged to do more if needed to fight off the risk of Japan-like deflation.

"It's a game changer from the ECB, but let's keep in mind that the impact on the real economy will take six to nine months," said Christophe Donay, head of strategy at Pictet, which has $446 billion in assets under management and custody.

"In the medium term, the decorrelation between the actions of Fed and the ECB will work in the favour of European shares, which remain cheaper than U.S. stocks and are poised to benefit from flow dynamics because global investors are still 'underweight' Europe at the moment," he said.

Euro zone peripheral markets led the rally on Friday, with Madrid's IBEX gaining 1.1 percent and Milan's FTSE MIB up 0.7 percent - led by Banco Santander (Berlin: BSD2.BE - news) and Intesa SanPaolo (Frankfurt: IES.F - news) respectively, as investors bet the banks would most benefit from the ECB's measures.

So far this year, the IBEX has gained 11 percent and the MIB 16.5 percent, strongly outperforming UK's FTSE 100, up 1.3 percent over the same period, and Germany's DAX, up 4.4 percent.

"It's 'mission accomplished' for Draghi. Confidence (BSE: CONFIDE.BO - news) is coming back, investors are unwinding portfolio hedges, sending the volatility index to pre-crisis levels," said David Thebault, head of quantitative sales trading, at Global Equities.

The Euro STOXX 50 Volatility index, Europe's main 'fear gauge', has tumbled 17 percent since the ECB announcement on Thursday.

The index - used to measure the cost of protecting stock holdings against market corrections because it usually moves in the opposite direction to cash equities - hit 13.7 on Friday, its lowest since the start of the financial crisis in 2007.

Investors will turn to U.S. jobs data at 1230 GMT for insight into the health of the world's biggest economy. According to a Reuters poll of economists, the closely watched report is expected to show that nonfarm payrolls increased by 218,000 positions last month.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up

(Editing by Sophie Walker)