European stocks were up around midday on Friday, hitting a six- month high as investors cheered data that hinted the euro zone may avoid slipping back into recession, eclipsing a disappointing start to the earnings season.

However gains were seen to be fragile, as Greece has yet to agree a debt deal with private creditors to avoid a chaotic default while U.S. monthly jobs data, due at 1330 GMT, could trigger profit-taking if the numbers are lower than expected.

Despite today's gains, our indicators show that doubts about this rally are rising, said Guillaume Dumans, derivatives and cross-asset structured products trader at Derivatives Capital, in Paris.

We could rise further before the payrolls, say 3,400 points for the CAC 40, but there's a whole lot of people out there ready to buy puts right there, so the risk is that we'll get profit-taking before the close.

At 1220 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,064.53 points, while the euro zone's blue-chip Euro STOXX 50 index was up 0.3 percent at 2,485.49 points.

The two indexes' momentum indicators, such as the relative strength indexes (RSI), showed the index flirting with 'overbought' territory.

Charts also showed divergence between the indexes and their RSIs, whose peaks have shown a declining trend over the past few days while the indexes rallied, a technical sign that the market is ripe for a pull-back.

According to a Reuters survey, non-farm payrolls are expected to have risen by an estimated 150,000 last month and the jobless rate is seen holding steady at 8.5 percent.

The January employment report is expected to be the proverbial box of chocolates, Societe Generale CIB economist Brian Jones said.

Anticipated seasonal layoffs of couriers and messengers, combined with continued pink-slipping by cash-strapped states and municipalities, likely capped the rise of non-farm payrolls at 110,000, following the 200,000-job jump posted in December, he said.

Using their below-consensus forecast as input into their fair-value models, Societe Generale strategists see the recent stock rally as overstretched.

Earlier on Friday, data showed Markit's Eurozone Composite Purchasing Managers Index (PMI) rose in January to 50.4 from 48.3 in December, unchanged from a preliminary reading and above the 50 mark that denotes growth for the first time since August, hinting the euro zone may avoid recession.

Around Europe, UK's FTSE 100 index up 0.5 percent, Germany's DAX index up 0.3 percent, and France's CAC 40 up 0.3 percent.

Miners lost ground, with Rio Tinto down 2.3 percent, BHP Billiton down 1.9 percent and Kazakhmys down 1.6 percent, cooling off after the previous day's rally sparked by news of a tie-up between commodities trader Glencore and mining group Xstrata.

Euro zone banks were among the top gainers, with Societe Generale up 4 percent and Banco Popolare up 3.7 percent, seen benefiting from the strong liquidity that has been recently provided by the European Central Bank to ease tensions surrounding the region's sovereign debt crisis.

The sharp recovery rally in the battered bank sector, which has seen the STOXX euro zone bank index surging 30 percent in the past 4 weeks, has eclipsed a poor start of the earnings season in Europe, where nearly two-thirds of companies that have reported so far have missed forecasts, a sharp contrast with earnings in the United States, where only one-third of the companies have disappointed.

So far in the European earnings season, 20 percent of the STOXX 600 companies have reported results, and 57 percent of them have missed forecasts while 43 percent have met or beaten forecasts, according to Thomson Reuters StarMine data to Thursday.

On Wall Street's S&P 500, half of the companies have reported results so far and 65 percent have posted in-line or better-than-expected results, while 35 percent have missed forecasts.