European shares rose on Thursday, reigniting a recent strong rally as investors awaited policy action from the European Central Bank to help shore up the euro's struggling economy.

The ECB is widely expected to cut interest rates by 25 basis points to a record low of 0.75 percent on Thursday, though the market reaction is likely to be muted.

If we get a (25 basis point cut) we could get a pretty modest reaction to it if that's what's expected. I think though it helps in terms of the more positive newsflow that we're starting to see on Europe - the summit was an upside surprise, expectations were pretty low going into that, Robert Parkes, equity strategist at HSBC Securities, said.

There's always a lot of focus not just on the announcement but also on the press conference, so how dovish the press conference is - that could have an impact on the market.

The FTSEurofirst 300 was up 0.2 percent at 1,047.65 by 1030 GMT, having closed down 0.1 percent on Wednesday, ending a sharp three-day rally spurred by a European Union summit which produced a raft of measures to tackle the euro zone debt crisis.

Volumes were light, at around 26 percent of the 90-day daily average, with traders sticking to the sidelines ahead of the ECB decision.

The euro zone's blue-chip Euro STOXX 50 was trading 0.1 percent higher at 2,315.57.

Friday's U.S. June jobs report could spur further gains, however, with a weak number possibly pushing the Federal Reserve in the direction of more asset buying.

Before then, and ahead of the ECB announcement, the Bank of England is expected to revive its quantitative easing programme with 50 billion pounds of fresh cash.

Volkswagen was the standout gainer on Thursday, ahead 6.4 percent on a plan to take full control in less than one month of car maker Porsche AG, up 0.5 percent.

Trading volumes in the pair were robust, with those for Volkswagen at 117 percent of the 90-day daily average, while Porsche stood at 180 percent by 1030 GMT.

Despite a recent surge higher, the benchmark euro zone index - which was technically 'overbought' on Wednesday - has failed to break above two key resistance levels: its 200-day moving average as well as the 50 percent retracement of the index's 22 percent slump from mid-March to early June.

Some traders and fund managers have been waiting for the index to break above these levels before piling back in.

While the anticipated 25 basis point cut from the ECB and 50 billion pounds of further stimulus from the BoE look largely priced in, Friday's U.S. jobs report could spur buying.

According to a Reuters survey of economists, U.S. employers are expected to have added 90,000 new workers to their payrolls last month.

Weak economic figures very often lead to more monetary stimulus which the market likes, so following this perverse logic a bad figure would not necessarily be bad for the market, said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

Three sets of data will provide signals for Friday's jobs report, with June Challenger layoffs due at 1130 GMT, ADP National Employment for June scheduled for 1215 GMT, and the latest weekly initial jobless claim numbers at 1230 GMT.