* STOXX 600 up 0.8 pct at 2-mth high
* Euro zone stocks eye best week since May 2017
* Financials, autos drive gains
* U.S. non-farm payrolls in focus (Adds closing prices, share moves)
By Kit Rees and Julien Ponthus
LONDON, Jan 5 (Reuters) - European shares powered to their best week since last April on Friday, with the British and Swiss benchmarks hitting records, propelled by optimism about a strengthening regional economy and fresh new highs on Wall Street.
The pan-European STOXX 600 index was up 0.8 percent, holding at a two-month high, while euro zone blue chips rose 1.1 percent, also scoring its best performance since April.
Markets outside of the euro zone saw several record levels broken. Switzerland's blue chip SMI index rose 0.5 percent to an all-time high, while Britain's FTSE 100 also jumped to another record, even if its rise, 0.4 percent, was more modest than its European peers.
"There is little impediment for continued gains whilst economic conditions that we've seen over the last few months continue, and there's every reason to expect that to continue to be the case," Ken Odeluga, market analyst at City Index, said.
"Every now and then when things are right you do get quite spectacular advances."
Gains were trimmed briefly when U.S. non-farm payrolls missed expectations, but the upward trend resumed quickly.
European autos was the top-performing sector, up 1.9 percent, while every other sector traded in positive territory.
Shares in Fiat Chrysler led the index with a 6.3 percent rise while Peugeot and Volkswagen were among the biggest gainers, up 4.3 percent and 2.7 respectively.
However, shares in British car insurer Admiral Group fell around three percent on the back of a downgrade from JP Morgan as well as some weak UK new car sales data.
Bayer was also a star performer of the day, with gains of 3.8 percent setting it up for its strongest day since April as some analysts see its mammoth deal with Monsanto nearing closure.
"The probability of deal closure in Q1 has risen in our view following press reports Bayer is exploring the sale of additional assets to satisfy EU/US regulators," Citi analysts say.
Healthcare stocks also performed strongly and among them, Genmab shone with a 6.2 percent rise as Jefferies wrote that the strong fundamentals of the sector should support EU biotech in 2018.
Struggling with "accounting irregularities", South Africa's Steinhoff jumped 6.5 percent after it announced on Thursday its CFO would step down.
Deutsche Bank was the worst performer, losing 5.1 percent after it said it would post a small net loss in 2017 after weak trading, a low level of client activity and the 1.5 billion euro ($1.81 billion) negative impact of a tax overhaul in the United States.
Reporting by Kit Rees and Helen Reid; Editing by Tom Pfeiffer, Alison Williams, William Maclean