By Sudeshna Ghoshal
Oct 2 (Reuters) - European stocks rebounded on Friday after a sharp selloff driven by a bond market rout, while investors awaited euro zone inflation data and a key US jobs report for fresh clues on the monetary policy path.
The pan-European STOXX 600 was up 0.9% at 632.77 points by 0835 GMT.
The index closed 1.3% lower on Thursday, touching its lowest level in more than three months as global government bond yields hit multi-year highs.
Attention now turns to the euro zone flash
inflation data due later in the day, which could offer signals on the European Central Bank's monetary policy plans.
Oil prices eased on Friday, as the market refocused on signs of recovering Middle Eastern supplies, but hovered above the $100-per-barrel level. [O/R]
"The broad economy looks okay... on the other side, the energy, the diesel impact on the economy can still be harder than what it is right now," said Ricardo Castillo, head of investments at Mirabaud Group.
Equities have been battered in recent weeks as global government bond yields surged to multi-year highs, leaving investors averse to risk assets.
European banking stocks were up 0.5%, but on track for their worst weekly performance since April, hurt by concerns about higher interest rates denting the economy.
Germany's Commerzbank dropped roughly 1% after RBC downgraded the stock to "sector perform" from "outperform".
Persistently high rates raise borrowing costs for companies and mortgage holders, while increasing the interest burden for governments.
"Even though oil is flowing, there's still not a lot of diesel going here. So that's a real issue. Then, the French election and the French big fiscal problem is going to weigh on sentiment," added Castillo.
France presented its 2027 budget bill on Thursday, seeking to enact unpopular belt-tightening measures aimed at reducing the deficit and reassuring bond investors ahead of next year's presidential election. Late last month, France's 10-year borrowing costs reached the highest level since the global financial crisis in 2008.
Focus will also be on US nonfarm payroll data expected around 1230 GMT. Forecasts estimate a gain of 90,000 jobs in September, while the unemployment rate is expected to be steady at 4.1%.
A hot print could revive bets on a second rate hike from the US Federal Reserve this month, currently priced at just 25% after two top policymakers said this week they wanted more data before deciding what to do next.
Back in Europe, technology shares led sectoral gains, up 2.2%, boosted by advances in Aixtron and AT & S Austria Technologie & Systemtechnik AG .
Among other movers, Puma declined 1% after US peer Nike projected a surprisingly steep drop in full-year revenue as it continues to grapple with weak demand in China and heightened competition.
Shares in Julius Baer rose 2.9% after the Swiss bank announced a share buyback programme of up to 600 million Swiss francs ($724 million).
(Reporting by Sudeshna Ghoshal in Bengaluru; Editing by Janane Venkatraman and Jonathan Ananda)
