* FTSEurofirst 300 rises 0.5 pct in morning trade
* Personal & household goods shares top gainers
* Watchmaker Swatch advances on positive outlook
By Atul Prakash
LONDON, Jan 10 (Reuters) - European equities bounced back on Friday, with personal and household goods advancing following a positive update from watchmaker Swatch and peripheral euro zone stocks adding to brisk gains made so far this year.
Swatch Group rose 4.1 percent after saying it expected "dynamic growth" this year, easing concerns of a downturn in export destination China.
The world's largest watchmaker, whose luxury brands such as Omega and Breguet are popular in emerging markets, helped the STOXX Europe 600 personal and households index to rise more than 1 percent and hit the top spot on the sectoral gainers' list.
"Luxury goods will be in demand this year as an improving economic outlook in developed markets is also good for emerging markets," said Didier Duret, chief investment officer at ABN-AMRO Private Banking.
"Strong equities are reflecting the sweet spot the central bankers are providing for the market. Investors believe that we are way off higher interest rates and the European economy is on a good footing."
At 0911 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,322.05 points, with Spain's IBEX rising 0.8 percent, Italy's FTSE MIB gaining 0.5 percent and Lisbon's PSI 20 advancing 0.5 percent.
The IBEX, the FTSE MIB and the PSI 20 are up 3 to 8 percent this year, helped by recent demand for Ireland's first bond sale since it exited its EU/IMF bailout and on expectations Portugal will be able to exit its bailout programme this year as planned.
The indexes have outperformed the FTSEurofirst, which is up just 0.5 percent in 2014. The pan-European index's rally on Friday stalled just below the previous session's 5-1/2-year high, with investors staying cautious before U.S. jobs data later in the day.
According to a Reuters poll, non-farm payrolls rose by 196,000 jobs last month, but the survey was conducted before Wednesday's data, which showed the private sector hired staff at the fastest pace in 13 months in December.
Robust data could prompt the U.S. Federal Reserve to move forward with plans to further wind down its quantitative easing programme. A stimulus cut is seen as negative for shares as it lowers liquidity.
Among individual movers, Lufthansa rose 5.7 percent to the top of the FTSEurofirst, with traders pointing to positive broker comments and a company presentation forecasting a shrinking 2014 fuel bill.